Egencia, an Expedia, Inc. company, on Thursday unveiled its 2012 Corporate Travel Forecast and Hotel Negotiability Index, finding that ADR for top corporate travel destinations will be slightly up overall in North America, Europe and Asia Pacific.
After a year of decreased negotiability in 2011, Egencia’s Hotel Negotiability Index suggests that corporations will continue to face a weak to moderate negotiating environment in 2012.
The hotel environment continues to show signs of year-on-year growth relative to increased corporate demand, resulting in improved hotel occupancy worldwide. In key destinations for 2012, Egencia forecasts average daily rate increases of 5% in North America, 2% in Europe and 7% in Asia Pacific.
“With the continued, albeit slow, rise of travel demand, increased ATPs (average ticket prices) and ADRs, reduced overall capacity, and fragile economic outlook, companies are placing an increased focus on mitigating costs and increasing efficiencies when possible,” said Mark Hollyhead, senior vice president, Egencia Americas.
In general, Egencia predicts ADR will go up overall in North America, with the largest increases in San Francisco at 15%, Boston at 10% and Minneapolis at 9%.
Egencia’s Hotel Negotiability Index, an indicator of the overall supply landscape in top North American cities, suggests that 2012 will continue to be a seller’s market for hotels, although not as widespread as 2011. The cities with the greatest opportunities for negotiations are Washington D.C., Calgary and Houston; while San Francisco, Boston and Minneapolis will have weak negotiability.
In Europe, ADR is forecast to be slightly up, with the largest increases of 9% in Moscow and 8% in Stockholm. Other cities are showing flat to slight ADR growth, including Berlin and Paris.
Supply in Asia Pacific is currently limited in relation to the demand, impacting the flexibility of negotiating corporate rates, Egencia reports. However, new supply growth is stronger than the rest of the world and is now catching up to demand growth. Asia Pacific ADR is up overall year-over-year, showing particularly strong growth of 15% in Hong Kong and 11% in Singapore.