Egencia Study: N. American Buyers More Bullish On Travel Than Europeans
Most North American travel managers expect to increase travel volumes throughout the rest of this year, while further cuts in travel volumes remain slightly more likely for European travel managers, according to an Egencia survey of more than 400 travel buyers.
The survey, part of Egencia's Global Benchmarking Study, released today, showed that 40 percent of buyers in both Europe and North America expect volumes to remain the same through the rest of the year. In North America, however, 44 percent of travel managers said they expect travel volumes to slightly increase over the next six months, and 11 percent said volumes would significantly increase. In Europe, only 34 percent of travel managers expected an increase, and 11 percent expected a significant increase.
Only 5 percent of North America travel managers expected any decrease in volume, compared with 16 percent of European travel managers, according to the survey. Of that subset in Europe, one in four said volumes would decrease significantly.
Noah Tratt, Egencia's vice president of supplier relations in the Americas, said the results signal that both the economic decline and recovery lagged in its impact on Europe. Overall volumes, however, are getting closer to levels prior to the downturn, he said.
"Signs are encouraging that we're very close, at least in the last few weeks, to those levels," Tratt said. "I would hesitate to say it's a trend."
Rising air costs could soon impact volume numbers, he said. Egencia's study, which incorporated its own analysis with data from ARC, Smith Travel Research and OAG, reported that North America point-of-sale air travel costs during the first quarter of 2010 increased year-over-year in nearly every major gateway city, particularly to London, which was up 25 percent, and to Seattle, Paris and Toronto, all up 17 percent.
European point of sale air travel was more flat, with decreases at many key cities within Europe, according to the study. Tratt said the region has seen a "less disciplined approach in terms of capacity," as well as increased competition from low-cost carriers and slower demand growth.
Average daily rates, meanwhile, continued to decrease during the first quarter at hotels in most major business travel gateway cities, according to the study. Chicago, Phoenix, Washington, D.C., Madrid and Mumbai all had decreases of 10 percent or more.
"Fewer airplanes at airports means fewer arriving to the cities, plus we're still seeing new rooms come on board," Tratt said. "We don't see the rates abating in cities where air capacity continues to come online, like Hong Kong."
The study also reported that U.S. car rental rates dropped by 10 percent during the first quarter but remain above 2008 levels.