As air travel and hotel costs for corporations are expected to rise in 2008, travel management companies (TMCs) such as BCD Travel are in position to advise corporate clients on how to better manage total trip costs.
According to BCD Travel, general airfares are expected to rise in 2008 by two to four percent from 2007 levels, while corporate air fare hikes will be less than two percent due to specially negotiated private air fares. Asia Pacific is expected to see annual passenger growth of seven and a half percent (with China increasing ten and a half percent and India at eight and a half percent vs. North America at less than two percent and Europe at five and a quarter percent). China will lead Asia Pacific in airport capacity potential while regional airports are expected to increase from 147 to one 190 and ninety by 2010. At the same time, Shanghai has become the second largest airport in Asia passing Hong Kong and Bangkok with over 40 million passengers per year, behind Tokyo at 63 million.
Mr. Roger Pfund, general manager and vice president, Asia Pacific Operations, BCD Travel, said, “Air carrier capacity will continue to be a factor in Asia despite the emergence of low cost carriers, which corporations tend to shun because of a relative lack of flexibility and scheduling. As a result, TMCs like BCD Travel must be ready to enable their corporate clients to deploy tighter travel policies on airfares as a means of better managing total trip costs.”
Meanwhile, the 2008 Industry Forecast expects average global room rates to increase by six to nine percent, with Asian markets approaching double digit increases. China will continue to expand its hotels, as it is expected to be the number one travel destination in the world by 2020, followed by India. However, China will face a near-term challenge as it moves toward the Olympics once the Chinese authorities begin to enforce government standards on hotels.
Pfund said, “Corporations are facing increased difficulties negotiating private rates in Asia as many hotels resist participating in RFPs, preferring to keep rates higher based on strong demand and high occupancy rates. Travel management companies will be pressed by their corporate clients to help better manage hotel rate increases through improved travel policy compliance and monitoring. Hotel costs will continue to increase, resulting in this segment increasing at rates higher than airfares.
“BCD Travel is therefore in a strong position to help advise corporate clients on better managing total trip costs, including more focus on pre-trip planning, policy strengthening and improved compliance,” Pfund concluded.