first-quarter ticket prices for travel within North America rose by an average
of 13 percent compared to a year ago, according to an analysis of OAG, ARC and
Expedia data analyzed by Egencia for an annual global benchmarking report.
officials largely attributed the higher ATPs to rising fuel costs, tightly
managed capacity and increased demand in some points of sale. "Fuel was
not as much of an issue last year," said Chris Vukelich, newly appointed
Egencia Americas vice president of supplier relations. "Now [airlines]
have the double whammy of demand up and fuel."
percentage increases for U.S. average ticket prices for North American points
of sale were found in San Diego and Houston (17 percent each), Seattle (16
percent), San Francisco, Chicago and Phoenix (15 percent each), Los Angeles (13
percent) and New York (12 percent).
increased even more in Canada, with Calgary up 28 percent, followed by Montreal
at 20 percent and Toronto at 19 percent. "Canada is an interesting
market," Vukelich said. "Demand is back and one carrier, Air Canada,
holds significant share. They are effectively in the drivers' seat with regard
America, first-quarter average ticket prices to destinations in Europe rose 1
percent compared to a year ago, while ATPs to Asia declined 4 percent.
European Points Of Sale
European points of sale, Egencia found that year-over-year average prices to
European destinations decreased by an estimated 4 percent, while ATPs to North
American destinations increased by 8 percent.
ATPs can be attributed to rising fuel prices (although the fuel price in euros hasn't
risen as much as the fuel price in U.S. dollars due to currency fluctuations),
tightly managed capacity by airlines and airline consolidation and
alliances," according to Egencia. "Decreased ATPs can be attributed
to overall financial vulnerability of the Euro-zone, increased competition from
low-cost carriers, increased competition with high-speed rail, and slowing
ticket prices for intra-European travel rose in Munich (9 percent), Dublin (3
percent) and Frankfurt (1 percent), but declined by as much as 13 percent for
Manchester and Milan, 11 percent for Barcelona and 10 percent for Stockholm and
Marseille. Average ticket prices declined from Amsterdam (7 percent), Glasgow
(5 percent) and Madrid and Berlin (4 percent each). However, Egencia noted
average prices for transatlantic travel rose 13 percent to or from Chicago (13
percent), Los Angeles (9 percent) and New York (7 percent).
Asia-Pacific 'Mixed Landscape'
officials found a "mixed air pricing landscape, varying on a
market-by-market basis" in the Asia-Pacific region. Air pricing for
intra-APAC destinations decreased by an average of 2 percent year over year,
with prices for North American destinations down by an average of 1 percent.
ATPs can be attributed to increased competition in the local markets, increased
capacity on the majority of routes, and the domestic and international pricing
battle for Australia," according to the study.
year-over-year ATP increase in the Asia-Pacific region was recorded for trips
to New York (17 percent). Fares to San Francisco declined 8 percent, while
those to Los Angeles dropped 4 percent.
average ticket pricing in the quarter rose 5 percent from Hong Kong, 4 percent
from Singapore and 2 percent from Melbourne. ATPs declined from Tokyo (10
percent), Delhi (7 percent), Sydney (5 percent), Shanghai (2 percent) and
Beijing (1 percent) and were flat from Mumbai, according to the analysis.
Hotel Rates Up, Car Prices Down
the only rising travel cost. Average daily hotel rates in the first quarter
"increased in most major business destinations, reversing the downward
trends from the previous year," according to Egencia. "The increase
in ADRs can be attributed to the return of corporate demand, reduced scale of
new supply and improved occupancy."
rates have recovered much faster than in the last downturn," Vukelich
America, first-quarter ADRs the rose 17 percent in San Francisco, 10 percent in
Dallas and 7 percent in both Boston and Los Angeles, all compared to a year
earlier, according to Egencia's analysis of ARC, Smith Travel Research, OAG and
Expedia internal data. ADRs rose 6 percent in New York, Philadelphia and
Phoenix and 5 percent or less in Chicago, Seattle, Calgary, Montreal, Denver,
Houston, Washington, D.C., Toronto, Minneapolis and Atlanta. ADR plummeted 27
percent in Vancouver, according to Egencia.
sophisticated buyer now knows that there's a blended approach to how you buy
hotels," Vukelich said. "You negotiate your own rates with some and
others you buy on the spot market as you can. Your success is going to be
driven by your willingness to guide people to a policy."
In the car
rental sector, Egencia said per-day rates in Q1 declined by an average of 5
percent compared to a year ago and were comparable to 2008 rates.
was a time when [car rental companies] stopped buying vehicles," Vukelich
said. "They've now started to increase supply, which means their fleets
are bigger, so perhaps there's a little more competitiveness going on."
Travel Volume Expected To Rise
increased air and hotel costs, 54 percent of nearly 350 buyers surveyed by
Egencia as part of the study indicated that they expected their companies'
travel volumes to increase during the remainder of 2011.
a reflection of continued optimism" in the recovery, Vukelich said.
"It reflects the fact that you have to run your business, people have to
travel, their own businesses have recovered and people have to get back out on
the road. It's that very bit of getting back out on the road that's driving ADR
significant increase in ADR and ATP in some markets, Vukelich said, "The
numbers demonstrate how sophisticated the airlines and hotels have gotten.
They've done a much better job bringing their businesses out of this last
economic downturn than after Sept. 11. Airlines have been disciplined about
their revenue management and capacity. Hotels also have been disciplined about
capacity. There are not as many new rooms coming into the market."
percent of buyers surveyed cited "cost control/reducing expenses" as
the "greatest challenge facing travel programs." Forty-three percent
of buyers indicated travel satisfaction was a challenge, 42 percent cited
"travel compliance/policy enforcement," and 40 percent cited
capturing a full view of travel spend.
percent of buyers surveyed indicated they planned to negotiate more this year
than in 2010, and 17 percent said they planned to change their travel polices
effective policy is key to reducing negotiated rates, but traveler compliance
and corporate culture are key considerations, Vukelich said. "Corporations
have personalities, the same as people," he said. "Some customers are
highly focused: Savings is what matters. Their people will do what matters to
drive the savings. Others are softer on that. Satisfaction is an important
factor, and it's not about how cheap it is."