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8/9/2019 Egencia 2010 Forecast
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Egencia 2010 Global Outlookand Negotiability Index
October 2009
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Section I: 2010 Corporate Travel Forecast
North American Airline Overview
Global Lodging Overview
European Airline Overview
APAC Airline Overview
U.S. Car Rental Overview
Section II: Negotiability Index
Section III: US Travel Management Trends
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Top Business Destinations - North America YOY 2010 vs. 2009
Air prices for corporate travel to increase 5% 10% YoY for these topbusiness destinations
Lodging prices for corporate travel to decrease 0% - 5% YoY
Market ATP ADR
Atlanta -1% 3%
Boston 2% 2%
Calgary 3% -1%Chicago 3% -2%
Dallas 5% -3%
Denver 9% -5%
Hong Kong 1% -4%
Houston 6% -4%
London 3% 1%
Los Angeles 4% -1%
Minneapolis 5% -1%
Montreal 4% -2%
Market ATP ADR
Munich -2% 1%
New York 5% -4%
Paris 2% 1%Philadelphia 11% -4%
Phoenix 12% -6%
San Diego 16% -6%
San Francisco 4% -2%
Seattle 10% -3%
Tokyo 1% -1%
Toronto 5% 0%
Vancouver 2% 0%
Washington DC 9% -2%
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Pricing Landscape North America
Upward Pressure Positive economic indicators may
drive increase in corporate traveldemand
Airlines to maintain capacity
discipline while focusing onimproving the margins
Merger of Northwest & Delta, andFrontier & Midwest
Inflation risk to remain in 2010
Lower exchange rate of USD toincrease cost of international travel
AIR
Downward Pressure Corporations are still price
sensitive
Continued depressed demand forfront of the cabin travel
Increased low-cost competition insome key corporate markets
New fees & ancillary revenue mayprovide an ability to reduce fares
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Pricing Landscape Global Hotel
Upward Pressure Companies expected to reinvest in
in business travel
Key sectors expected to regainsome strength (pharma, financials)
Corporations to increase spend onmeetings / conferences
European business hubs willbenefit from the increased demand
H
OTEL
Downward Pressure Lower air capacity brings fewer
travelers
Increased hotel supply in the shortterm, new hotel properties addedin 2008 and 2009
Rising air prices to put pressureon hotel pricing
Corporate contracts signed in2009 for 2010 hotel stays are atreduced rates
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Top Business Destinations - Europe
YOY 2010 vs. 2009 ADRs to slowly adjust upwards
Short- and long-haul travel for topEuropean business destinations willrise slightly
Market ATP ADRAmsterdam 3% 0%
Barcelona 7% -1%
Berlin 0% 2%
Brussels 0% 3%
Chicago 6% -2%
Frankfurt 4% 1%
London 1% 1%
Los Angeles 3% -1%
Madrid 1% 2%
Milan 2% 1%
Munich 2% 1%
New York 4% -4%
Paris 0% 1%
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Pricing Landscape Europe
Upward Pressure European markets have shown
signs of positive growth
Increased business demandexpected
Recent airline capacity cuts and anincreased focus on the revenue
margins by airlines Merger of Northwest & Delta, JV
between Air France & Delta,additional consolidation
AIR
Downward Pressure Decline in front of cabin travel
Economic conditions continue todrive uncertainty
Increased competition on routes
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Top Business Destinations - APAC
YOY 2010 vs. 2009 Low to flat ADRs with only a few
exceptions
Small ATP increases
Market ATP ADRBeijing 4% -8%
Delhi 4% -4%
Hong Kong 4% -4%
Los Angeles 1% -1%
Melbourne 3% -1%
Mumbai 1% 0%
New York 1% -4%
San Francisco 6% -2%
Shanghai 2% -1%
Singapore 1% 1%
Sydney 0% 1%
Tokyo 0% -1%
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Pricing Landscape APAC
Upward Pressure APAC markets have shown signs
of positive growth
Increased business demandexpected
Recent airline capacity cuts and anincreased focus on the revenue
margins by airlines Merger of Northwest & Delta
Downward Pressure Decline in front of cabin travel
Economic conditions continue todrive uncertainty
Increased competition on routesAIR
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US Supply Landscape Car Rental
Upward Pressure
Difficult leasing conditions inventory cost is rising
Cost of financing has beenincreasing
Depressed used car market
Industry Consolidation (Hertzacquiring Advantage Rent-A-Car)
Shift from air to car rentals forshort trips
CAR
Downward Pressure
Constricted demand due toeconomic environment
Car class downsizing has becomea natural result of new policyrestrictions
Day trips and car-sharing havebecome more common
Market factors will shift in 2010 as more financing becomes available and the competitionfor the business traveler heats up.
Our forecast suggests 5% decrease in RPDs YoY in 2010
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Section I: 2010 Corporate Travel Forecast
North American Airline Overview
Global Lodging Overview
European Airline Overview
APAC Airline Overview
U.S. Car Rental Overview
Section II: Negotiability Index
Section III: US Travel Management Trends
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Dallas
Boston
Chicago
Atlanta
Denver
Houston
Los Angeles
Minneapolis
New York
Philadelphia
PhoenixSan Diego
San Francisco
Seattle
Washington DC
Moderate
Calgary
Toronto
Montreal
Vancouver
StrongWeak
NA Supply Outlook - Negotiability
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Moderate
Strong
Weak
Amsterdam
Barcelona
Berlin
Brussels
FrankfurtLondon
Madrid
MunichParis
Milan
EU Supply Outlook - Negotiability
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Moderate
Strong
Weak
Beijing
SydneyMelbourne
Delhi
Hong KongMumbai
Shanghai
Singapore
Tokyo
APAC Supply Outlook - Negotiability
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Section I: 2010 Corporate Travel Forecast
North American Airline Overview
Global Lodging Overview
European Airline Overview
APAC Airline Overview
U.S. Car Rental Overview
Section II: Negotiability Index
Section III: US Travel Management Trends
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Business Travel Landscape - Now vs. October 2008
Now
Current EnvironmentDue to the current economicconditions, has your companychanged its amount of businesstravel?
Looking AheadAre you planning to increase ordecrease your travel budget in2010?
Egencia Travel Manager Survey
Has notchanged
48%
Slightlyincreased
3%
Significantlyreduced
11%
Slightlyreduced37%
Source: Survey of over 100 Egencia clients, conducted
September/October 2009 | Survey of over 200 Egenciaclients, conducted October 2008
October 2008
Has not
changed29%
Slightlyincreased
10%
Significantlyreduced
17%
Slightly
reduced42%
Increase13%
DontKnow23%
Reduce9%
Remainthe same
55%
Increase19%
Dont
Know
27%
Reduce10%
Remainthe same
45%
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Controlling Travel Spend, Managing CostsNow vs. October 2008
Top Cost-Cutting Practices Now October 2008
1. Booking in advance 57% 55%
2. Rigorous enforcement of travel policy 52% 44%
3. Actively tracking unused tickets 45% 44%
4. Pre-trip approval requirements 44% 43%5. Lower class of service 23% 25%
Tighter budgets (including budget cuts and travel freezes) is the primaryreason for decreased business travel, representing 75% of those surveyed.
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Controlling Travel Spend, Cont.
Renegotiating:Have you dramatically changedhow/when you evaluate orrenegotiate your travel programdue to the economic climate?
No, but wellmake changes
in 201018%
Yes, were makingchanges more frequently
33%
Yes, were making changesless frequently
6%
No, and we haveno plans to do so
27%
I dont know
16%
Source: Survey of over 100 Egencia clients, conductedSeptember/October 2009
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Strategies to Monitor and Control Travel Costs
Control
Control unnecessary trips through pre-trip approval
Review and meet your supply commitments
Consolidate your meetings & travel spend
Monitor
Monitor spend weekly, not quarterly
Track and redeem un-used tickets
Identify reasons for leakage
Educate your travelers on how they can make a difference
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Meetings & Incentives Market
Short Term Work to limit liability
Evaluate hotel contractsand consolidate topreferred suppliers
Leverage short-haultravel as a way to cutcost
2010
Long Term Focus on budget-
management and ROI
Consolidate corporatetravel and M&I under
one program Enforce program
policies
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