Canadian business travellers should expect to see a slight rise in domestic air travel costs in 2011, a decline in Canadian car rental rates and a mixed bag when it comes to hotel costs. But the best news from Egencia’s 2011 Corporate Travel Forecast and Hotel Negotiability Index is growing optimism about travel spend, with 34% of North American and European travel buyers expecting increased corporate travel budgets next year, versus 13% in last year’s study.
“Corporations are travelling again this year, though still below 2008 levels,” said Rob Greyber, President of Egencia, Expedia’s corporate travel management company. Greyber says clients remain focused on cost containment and cost avoidance but are achieving these goals through tools such as policy compliance rather than broad-stroke cuts in travel. “We expect the modest spending rebound to continue, but careful, policy-driven governance will still be a theme in 2011.”
Egencia predicts that airline ticket prices to Canadian corporate travel destinations such as Toronto, Montreal, Calgary and Vancouver will generally follow the North American trend and remain flat to slightly up over the coming year. However, the study suggests that corporate travellers should expect lower Canadian car rental rates year-over-year in 2011, a trend that runs contrary to the North American average.
After another year of significant flexibility, Egencia’s Hotel Negotiability Index suggests corporations will face a more challenging negotiating environment in 2011. “The hotel negotiation opportunity for travel and business decision makers is comparatively weak in 2011,” said Noah Tratt, Vice President, Supplier Relations, Egencia Americas. “We’re advising clients to look for value by working closely with their preferred supply partners to drive traveller compliance, negotiate favourable Terms and Conditions and consider inclusion of valuable amenities.”
With little new supply coming online and occupancy increasing in most North American markets, hotel rates will begin to climb out of the doldrums in many cities. Toronto room rates are expected to increase by 2%, while business travellers will pay 5% more in Montreal. It’s a different story in Vancouver and Calgary. Vancouver rates were pushed up significantly by the Olympics, so 2011 rates are expected to see the steepest decline of any major North American city, dropping by 5%. Calgary rates are also expected to drop, though only by 1%.
New to this year’s forecast is an ‘Advance Purchase Advisory’ that identifies ideal advance booking windows and potential savings for flight purchase for specific business travel destinations. The tool suggests that those with business trips heading to Calgary, Toronto and Montreal can get the best fares by booking three to four weeks in advance. Canadian corporate travellers could see savings between 29% and 48% on travel to major Canadian urban locations by booking within that window.
