CWT Vision Q1 2012 Issue - Carlson Wagonlit Travel

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CWT Vision Q1 2012 Issue - Carlson Wagonlit Travel

Insights into Effective Travel Management

Q1 2012

Despite some management,

car rental opportunity abounds

| 4

Low cost carriers can represent

an alternative for corporate travel

| 6

With 2012 hotel rates final,

GDS audits begin

| 9

APAC – Integration of non-GDS

properties next frontier for

hotel programs

| 12

EMEA – Hotel VAT increase in France

equals another price hike for buyers

| 14

LATAM – Unique regional characteristics

impact LATAM’s travel landscape

| 16

NORAM – Opinion: influence,

not control, will move the needle

| 18


| Q1 2012

3

Seize the day!

While the New Year’s resolutions many of us made two short months ago may already have been

forgotten, this first CWT Vision of 2012 reminds us that the year is still relatively young. There is plenty

of time to resume progress on the improvements you’ve vowed to make for your travel program this

year, and we’re here to help with this issue, full of perspective and advice that addresses a wide variety

of current opportunities and challenges for travel buyers. And, you can now access this information

beyond these pages alone – CWT Vision and other CWT communications are now available on iPad!

Christophe Renard

If you’ve resolved to dedicate more focus to ground transportation in 2012, you’ll want to read our

global article about rethinking car rental management, whether you’ve been managing this area for

some time or are just getting started. We also take a look at the increasing prevalence of low cost

carriers worldwide, including some nuances to be aware of when working with these airlines vs. legacy

carriers. Finally, we’ll see how CWT clients came out in hotel negotiations this year, and take a look at

one of the most important things buyers can do to reinforce their programs during the first months

of each calendar year.

Nick Vournakis

Our Regional Spotlight articles highlight the potential for integrating properties that do not participate

in the global distribution systems (GDSs) into managed hotel programs, based on the efforts of one

of CWT’s Asia Pacific-based clients. We also examine the impact that recent value-added tax (VAT)

increases are having in France and elsewhere in Europe, and the leader of our North American

consulting practice shares his thoughts on seeking to influence rather than control travelers to keep

them supportive of the travel program.

Co-Editors in Chief

Christophe Renard

Nick Vournakis

Email

cwtvision@carlsonwagonlit.com

CWT contributors:

Mike Austerschmidt

Hélène Buchfinck

Pierre-alexandre Chanteau

Jodi Cumming

Jason Ellingson

Doyle Gunnell

David Huguet

Tim Hunt

Abhijeet Kar

Aude Kremer

Vincent Lebunetel

Alison Nicholson

Gary Nicholson

Mike Orchard

Virginie Pouget

Chris Sabby

Breck Spinner

Matthew Stewart

Jair Suarez

Darren Waite

Joel Wartgow

Finally, as Latin America continues to experience explosive growth – economically and consequently,

in business travel – we are pleased to introduce a Regional Spotlight in each issue of CWT Vision

focused specifically on Latin America. If managing travel in this region has been or will be part of your

responsibilities, you’ll want to read our first article on the specifics of managing travel in the region,

and stay tuned for much more on Latin America in future issues.

We hope the information in the following pages helps you seize the day and inject some new life into

your travel program, regardless of its current level of maturity. As this issue hopefully demonstrates, in

our fast paced, ever-evolving industry, there are always more stones to be overturned in the hunt for

added value and efficiency, and it’s never too late to start tackling a new challenge.

Web

www.carlsonwagonlit.com

Until next time,

Artwork/Photos

Photos: Cover and page 15 © Shutterstock, and pages 4, 9, 12 & 14 © istockphoto

All other artwork by CWT

CWT Vision is published quarterly by the CWT Solutions Group, the CWT Travel Management Institute,

and CWT Corporate Marketing & Business Intelligence teams.

31 rue du Colonel Avia

75904 Paris Cedex 15

France

Please consider the environment before you print this publication in part or in full.

All monetary references in this publication denote U.S. dollars unless otherwise noted..

Copyright © 2012 CWT

Christophe Renard, Co-Editor in Chief

Vice President, Corporate Marketing

& Business Intelligence

Nick Vournakis, Co-Editor in Chief

Vice President, CWT Solutions Group


4

Global perspective | Q1 2012

5

Despite some management,

car rental opportunity abounds

Car rental costs have been discussed as an opportunity

for travel program savings for years now, as this area

constitutes 4-5% of total spend for most travel programs.

Many organizations are indeed managing this area more

closely than in the past, often prompted by the need to drive

further savings from a travel program that is highly optimized

in other areas.

Given car rental constitutes a smaller amount of volume than air and hotel, even those buyers who are managing it often don’t

approach it with the same level of discipline as they do other categories of travel spend. For example, rather than conducting a full

request for proposals (RFP) process with car rental suppliers as they would with airlines and hoteliers, many buyers do a more casual

request for information (RFI). Similarly, instead of benchmarking their prices against the industry and similar companies in terms of

size or travel pattern, many buyers just check their car rental prices against those of a few other organizations in the industry - often,

with nearby organizations with whom the buyer has an existing relationship.

Instead of taking this more casual approach, the CWT Solutions Group strongly recommends buyers in all parts of the world adopt

many of the same processes for managing car rental as for air and hotel. This includes conducting a full RFP at least every two years

to stay current on market pricing and continuously optimizing the program between sourcing cycles by reviewing spend patterns,

contracts, and the supplier landscape on a regular basis. See additional recommendations below.

Pricing complexity

Another important aspect of car rental pricing for global programs is the variance in pricing structures across regions. Obviously, buyers must

also understand these nuances to negotiate effectively. For example, in North America and Latin America, there are daily, weekly, and monthly

rates. This is similar in the United Kingdom, but elsewhere in EMEA there can be a specific rate for 1-2 day rentals, another rate for 3-4 day

rentals, and so on. In Asia Pacific, there are separate rates by country, by metro area, and for remote areas such as in Australia and New Zealand.

Even so, many travel buyers are not yet putting the same rigor

around car rental negotiations as they do for air and hotel,

meaning that additional opportunities for cost reduction are

being left on the table. The CWT Solutions Group’s ground

transportation practice provides the below perspective on the

unrealized savings available, and how to more intentionally

tackle this category of spend.

The evolution of car rental worldwide

Car rental industries vary around the world in terms of their

prevalence and sophistication. The most mature supplier

market is North America; meanwhile, suppliers in Europe,

the Middle East, and Africa (EMEA) have made significant

advancements in the last decade and are soon expected to

reach a similar level of maturity, aided by developments in

yield management and more.

Strategic management of the car rental category is still in the early stages throughout much of the Asia Pacific region, as well as

in most Latin American countries, with the exception of Mexico and Brazil. However, even where available in Asia Pacific and

Latin America, car rental can be a risky option based on local security concerns, adding complexity to the management of car

rental in these regions in particular. Local regulatory requirements can also make car rental viability a challenge; for example, to

rent a car in China, travelers must hold a Chinese driver’s license. This is why some Chinese rental car providers supply a driver

as part of the rental fee.

Buyers benefit from tough competition

As CWT’s 2012 Global Price Forecast illustrated, car rental is one of the only categories of spend where flat to decreased pricing is

achievable in 2012, thanks to significant competition among suppliers for corporate business. But, to fully take advantage of this,

many buyers must adjust their approach.

Following are the most critical things to keep in mind for buyers looking to better manage their ground transportation programs:

Gather more information. As mentioned above, buyers should conduct a full RFP at least every two years to understand

how their incumbent supplier’s pricing compares with competitors. Changes in the industry impact suppliers’ strategies on

working with organizations, and things can change quickly. For example, car rental suppliers are now able to offer corporate

rates that would have been unprofitable for them in the past, thanks to significant efficiency gains in operations.

– A thorough benchmarking exercise should also be conducted, working with the organization’s travel management

company (TMC) or ground transportation consultant to gain access to as much pricing data as is available. Here

again, don’t look at rate alone - determine which ancillary services others have successfully negotiated as well.

Demand full data. As standard practice, car rental suppliers provide clients with high-level data that does not provide

a full picture of the organization’s spend. Buyers should request complete data from their suppliers, which will reveal the

amount the organization spends on rental rates vs. ancillaries and other charges. Some charges are not controlled by

the supplier and therefore are not negotiable, such as airport concession fees and taxes, while many others are up for

negotiation. This data can then be used to conduct more informed negotiations.

Negotiate on all rate types. For most organizations, 30-40% of their total car rental spend goes toward weekly or

monthly rentals, which should qualify for cheaper rates than daily rentals. However, most buyers don’t realize that weekly

and monthly rates are available, or don’t realize they can negotiate these as well. Focusing on this specific detail can drive

significant incremental savings to the organization.

Look beyond rate. Like air and hotel, ancillary fees abound in car rental, and can contribute significantly to the overall

cost to rent. Buyers should determine which car rental ancillaries are most used by their travelers, such as GPS capability

or refueling, and negotiate discounts on those items.

Additional savings are waiting to be uncovered for the majority of organizations through more diligent car rental management.

The above tips should help travel buyers make strides in this area, regardless of the current sophistication of their program.

Doyle Gunnell

Global Project Manager, ground transportation consulting, CWT Solutions Group

Doyle is responsible for the CWT Solutions Group’s global ground transportation consulting practice, assisting clients in sourcing

and optimizing car rental, chauffeured transportation, rail, and more. He has nearly 30 years of ground transportation industry

experience and has been with CWT since 2011. He is based in Houston, Texas, USA.

Copyright © 2012 CWT


6

Global perspective

| Q1 2012

7

Low cost carriers can represent

an alternative for corporate travel

Average ticket prices (ATP): low cost vs. legacy carriers

$600 $600 North America Markets (USD)

$500 $600 $500

$400 $500 $400

$600 $600

$500 $600 $500

$400 $500 $400

Latin America Markets (USD)

$300 $400 $300

$300 $400 $300

Low cost carriers (LCCs) are growing in number worldwide, and continue to garner interest from some corporate clients. Working

with an LCC involves some similarities for buyers accustomed to contracting with legacy carriers, as well as some important

differences that must be considered. Below, CWT Solutions Group airline consultants from around the world weigh in on the

nuances of engaging with LCCs. .

$200 $300 $200

Q1 Q1 2011 2011 $200

Q2 Q2 2011 2011 Q3 Q3 2011 2011 Q4 Q4 2011 2011

Low Low Cost Cost Carriers Carriers ATP ATP Legacy Legacy Carriers Carriers ATP ATP

Q1 2011 Q2 2011 Q3 2011 Q4 2011

Low Cost Carriers ATP

Legacy Carriers ATP

Europe, the Middle East, and Africa Markets (EUR)

$200 $300 $200

Q1 Q1 2011 2011 $200

Q2 Q2 2011 2011 Q3 Q3 2011 2011 Q4 Q4 2011 2011

Low Low Cost Cost Carriers Carriers ATP ATP Legacy Legacy Carriers Carriers ATP ATP

Q1 2011 Q2 2011 Q3 2011 Q4 2011

Low Cost Carriers ATP

Legacy Carriers ATP

Asia Pacific Markets (AUD)

Telling the difference

The distinction between low cost and legacy carriers is less concrete today than it was in years past. Legacy airlines now

break out charges for various aspects of the flight experience, and have begun to buy fuel on a hedged basis - both practices

formerly conducted by LCCs alone. Meanwhile, LCCs have in some cases chosen not to charge for services that legacy

airlines have begun charging for. LCCs are also experiencing higher expenses more in line with the cost structures of legacy

airlines, attributable to the expiration of some of their most advantageous fuel hedge arrangements, and to increasing costs

associated with mergers, acquisitions, employee relations, and more.

Finally, in some markets, such as North America and Europe, legacy airlines are pressured to match the prices of LCCs flying the

same routes to avoid losing business, meaning that in some cases, there is no longer a difference in fares between the two types

of carriers. This is not the case in Asia Pacific, where the price difference between the two remains significant in most cases.

Even so, some common differences remain between LCCs and legacy airlines, typically driven by LCCs’ continued goal to

operate at the lowest cost possible: generally speaking, LCCs fly more point-to-point routes while legacies use the huband-spoke

system; most LCCs do not participate in global distribution systems (GDSs) while legacies do; and many LCCs

fly to secondary airports within a market, while legacies service primary airports in addition to some ancillary airports. LCCs

and legacy carriers primarily compete on short-haul routes. A variety of LCCs around the world have publicly shared their

intentions to enter the long-haul market and some are buying larger aircraft to enable this growth; however, it is too early to

tell whether LCCs will be able to effectively compete with legacy airlines on these flights, as well as whether the offering will

appeal to business vs. leisure travelers.

The main players by region

The most significant LCCs operating throughout Latin America today are Uruguay’s Pluna, Azul Brazilian Airlines, Satena in

Colombia, Interjet and Volaris in Mexico, and Star Peru. Interjet and Volaris have experienced substantial growth following the

demise of Mexicana in 2010, as has Azul, which is benefiting from Brazil’s overall strong travel growth. In Europe, the Middle

East, and Africa (EMEA), the most prominent LCCs are Ryanair, easyJet, and Norwegian Air Shuttle in Europe, and Jazeera

Airways and Air Arabia throughout the rest of the region. There are many LCCs operating in the Asia Pacific region, with Virgin

Australia, Malaysia’s Air Asia, and Jet Star being the largest in terms of the number of passengers carried. Other notable LCCs

include IndiGo, Tiger Airways, Spring Airlines, and Cebu Pacific Air. The coming year will bring increased momentum for

LCCs in Asia Pacific, with five new LCCs expected to begin operations in 2012: Jetstar Japan, Peach Aviation, Scoot Airlines,

SpiceJet, and Thai Smile.

The main LCCs in North America are Southwest Airlines and its wholly owned subsidiary AirTran Airways, JetBlue Airways,

WestJet, and to some extent, Frontier Airlines. LCCs in North America have followed the lead of legacy airlines and have

400 400 € €

300 400 300 € €

200 300 200 € €

100 200 100 € €

100 0 € 0 €

AUD AUD 200 300 200

Q1 Q1 2011 2011 0 €

Q2 Q2 2011 2011 Q3 Q3 2011 2011 Q4 Q4 2011 2011

Q1 Q1 2011 2011 AUD 200

Q2 Q2 2011 2011 Q3 Q3 2011 2011 Q4 Q4 2011 2011

Low Low Cost Cost Carriers Carriers ATP ATP Legacy Legacy Carriers Carriers ATP ATP

Q1 2011 Q2 2011 Q3 2011 Q4 2011

Low Low Cost Cost Carriers Carriers ATP ATP Legacy Legacy Carriers Carriers ATP ATP

Q1 2011 Q2 2011 Q3 2011 Q4 2011

Low Cost Carriers ATP

Legacy Carriers ATP

Low Cost Carriers ATP

Legacy Carriers ATP

Source: CWT client data using Top 10 LATAM markets and Top 50 markets everywhere else

engaged in significant consolidation in recent years, with Southwest acquiring AirTran, and Frontier absorbing Midwest Airlines.

Among other benefits, these alignments expand the networks of the participating airlines, which can be particularly attractive

to corporate travel buyers.

Courting corporate business

AUD AUD 600 600

AUD AUD 500 600 500

AUD AUD 400 500 400

AUD AUD 300 400 300

While LCCs may historically have targeted leisure travelers, today most see the value of working with business travel clients,

and are pursuing corporate business.

Some North American LCCs will participate in a corporate request for proposals (RFP) process when invited, though many

are more reluctant than legacy airlines to provide significant discounts, based on their assertion that their fares are already

lower than what legacy carriers offer. In Southwest’s case, they also tout a cheaper overall cost to fly, with free checked bags

and no change fees. When LCCs do offer discounted fares, it is typically on a route-specific basis rather than across the entire

volume of business an organization drives to them. Additionally, like their legacy counterparts, LCCs continually adjust their

approaches to corporate business as their own business objectives evolve, which requires ongoing diligence on the part of

travel buyers working with these carriers.

In EMEA, most LCCs are in the early stages of being able to offer discounted fares and back end rebates, which would enable

them to become more attractive to corporate clients. Because selling to business travel clients historically has not been a

primary focus, it will likely take some time for these carriers to enable discounting in their operational systems, to train their

sales staffs accordingly, etc. Meanwhile, CWT has observed increased interest in LCCs among its Asia Pacific client base, with

organizations seeking to understand the viability of incorporating LCCs into their managed air programs, and the implications

of doing so. This new interest has been aided by LCCs’ increasing credibility among Asia Pacific travelers, who for many years

were accustomed only to legacy carriers.

Copyright © 2012 CWT


8 | Q1 2012

Global perspective

9

GDS participation varies

Southwest is one example of a North American LCC that participates in the GDS, though it withholds some of its content

exclusively for its direct corporate booking channel, SWABIZ. Some travel distribution channels do offer the ability to integrate

SWABIZ content into the rest of a company’s travel program, while others currently do not yet have that capability. In EMEA,

Norwegian Air Shuttle and Air Berlin participate in the GDS, and easyJet is expected to follow soon. In Asia Pacific, Virgin

Australia and several other LCCs participate in the GDS as well. Meanwhile, in Latin America, Pluna and Azul participate.

With 2012 hotel rates final,

GDS audits begin

challenges with LCCs

Until more LCCs participate in the GDS, there will continue to be some significant challenges to integrate them into managed

travel programs because their fares cannot be searched for and compared alongside legacy airlines in online booking tools or

by travel counselors. In those cases, data for flights booked with an LCC often is not consolidated with other travel program data,

making it difficult to get a complete picture of the company’s air volume, and causing challenges with traveler tracking in the

event of an emergency. Some clients have adopted manual processes with their TMC for integrating LCC content into systems

that enable reporting and tracking, though this typically represents an additional cost to the organization.

Also, the fact that many LCCs fly to secondary airports can make them a less efficient option for busy business travelers, and

can necessitate additional ground transportation costs that can offset the cheaper airfare. For this reason, in EMEA, Ryanair

is primarily used by leisure travelers because it flies to and from secondary airports, while easyJet and Norwegian Air Shuttle

are able to compete for corporate business because they are also able to utilize primary airports. This is less of an issue in

Malaysia and Singapore, where LCCs often use separate airport terminals directly neighboring primary airports.

It is also important to monitor the impact of an LCC agreement on existing market share agreements with legacy airlines

to ensure the company is not missing targets it has already agreed upon with other partners, which can result in penalties

later. Finally, managing travelers’ expectations can be a challenge. Travel buyers who are trying to integrate LCCs into their

program must educate travelers on the benefits of using those carriers over other options, particularly when travelers may be

motivated by access to frequent flier benefits or airport lounges provided by the legacy airlines.

recommendations

Understand what LCCs can offer. As illustrated above, LCCs can represent both opportunities and challenges for a

managed air program, which must be weighed in relation to the specific priorities of the organization. Don’t discount

LCCs - if they are willing to participate in a bid process, invite them in to see what they have to offer and to create an

increased sense of competition among incumbent carriers.

Compare total costs. Because of the blurred line between LCCs and legacies, the total cost to fly associated with

each option must be closely examined. Decisions should not be made on base rate alone, but should take into account

ancillary fees, additional transportation costs associated with flying into secondary airports, and more.

Anticipate other impacts. Travelers may need to be instructed to give themselves more time to reach their destination

when flying on an LCC, and differences in flight schedules and frequencies between LCCs and legacy carriers may make

catching other flights easier or more difficult when necessary.

Be strategic. LCCs can play a role in travel programs when they help increase competition among suppliers, provide an

additional option in key markets, and more. The key is to ensure the addition of an LCC does not erode volume for existing

market share agreements with legacy carriers, or otherwise detract from the overall program. Buyers should take a holistic

view of their program before implementing changes.

Copyright © 2012 CWT

For most managed hotel programs, the first part

of each year is focused on ensuring that all the

hard work of negotiating hotel rates over the

previous months pays off for the organization.

This includes working with preferred hotels to

ensure discounted rates are available for travelers

to book beginning January 1, and conducting

ongoing monitoring to track availability of those

rates throughout the year. Following is a recap of

how hotel negotiations concluded among CWT

clients worldwide, and an update on the global

distribution system (GDS) monitoring process

currently underway for most organizations.

Paying more and getting less

Hotels had the upper hand this year based

on limited capacity in many markets and

continued strong demand. After negotiations

were finalized*, North American rate increases

typically ranged from 1-4% compared to 2011

rates. Throughout Europe, the Middle East, and

Africa (EMEA), rate increases concluded at

0-3% depending on the country and city. The most notable exception is London, where hotels were able to raise rates an

average of 4% for the year based on double-digit rate increases during the several months surrounding the Summer Olympic

Games, the Paralympic Games, and Wimbledon. In Asia Pacific, rates increased an average of 3-5%, while in Latin America the

increase was slightly higher, at 3-6% overall.

Hotels exercised increased leverage over other aspects of corporate agreements beyond rate alone, including raising the annual

room night threshold required to receive a discounted rate. For example, in North America and in rural parts of Australia, many

hotels doubled or even tripled the threshold, declining to bid for business that did not meet their new requirements. Hotel

chains worldwide also declined to bid at several properties requested by many buyers, further illustrating that hotels were

selective this year in where they were willing to extend negotiated rates.

*Hotel negotiation results are based on changes in discounted rates that CWT Solutions Group clients have secured with preferred properties. This data is

influenced by the specific travel patterns and supplier relationships of the CWT Solutions Group’s client base worldwide. For these reasons, results achieved

by CWT Solutions Group clients differ from the projections CWT makes in its 2012 Travel Price Forecast, which encompasses negotiated and non-negotiated

hotel rates based on data for all CWT clients worldwide (not just CWT Solutions Group clients).


10 | Q1 2012

| Q1 2012

11

Also, whereas in the past amenities would have been part of most initial rate offers, in some regions hotels withheld amenities

in the first round of negotiations this year, making them a bargaining chip to be negotiated alongside rate changes. In the end,

hotels in most regions moved to include either breakfast or internet access, but not both, as complimentary in the corporate

rate. An exception is within EMEA, where CWT observed many hotels more willing than in the past to include free internet to

try to help offset rate increases. In parts of Asia Pacific where new hotels are coming online, CWT recommends buyers push

for free internet access with their room rate, since the property is likely being outfitted with that capability during construction.

At existing properties it is likely a harder sell, as internet does represent a more significant ongoing expense to those hotels.

Auditing critical for making negotiations count

Once hotel negotiations have concluded, discounted corporate rates must be made available in the GDS to be accessible for

travelers to book. To enable this process, clients or their hotel consultants must provide rate loading instructions to preferred

hotels. These instructions contain the client-specific pseudo city code (PCC) to which the rates should be uploaded in order to

appear to the organization’s travelers.

For programs that operate according to the calendar year, negotiated rates should be loaded in the GDS and available beginning

January 1. At that time, the annual auditing process begins to ensure rates are loaded and accurate. In the past it took as many

as five rounds of audits for a client to achieve a 90% accuracy level, meaning that 90% of all of the negotiated rates across properties

were available and accurately reflected in the GDS. In between each round, the client or their hotel consultants work directly with noncompliant

properties to make the necessary corrections. Depending on the number of audits needed to reach an optimal accuracy

level, the auditing process can take place throughout Q1 and sometimes into Q2 of each year.

Negotiated 2012 Hotel Rate Evolution

160 €

150 €

140 €

Today, in some regions such as North America, higher accuracy has been achieved with fewer rounds of audits, thanks to

a process called rationalization, which consolidates all of the information into a single rate code and a single PCC to which

hotels then load rates. This reduction of complexity has greatly improved the rate loading process. In fact, accuracy levels of

95% are now not uncommon, and can be achieved in anywhere from three to five rounds of audits. Audit results have also

been positively impacted by improved automation from hotels, as well as by long-term relationships between clients and hotel

consultants, which enables better ongoing optimization of the auditing process.

Following are some recommendations from the CWT Solutions Group for maximizing the rate audit process:

n Communicate early. While some clients are understandably resistant to communicate their rate codes to hotels before

negotiations are complete, early communication improves the hotel’s ability to upload the preferred rate to the GDS by

January 1. Hotels that do not end up getting accepted into the program have gotten better about automatically removing

any rates loaded during the process, and the buyer’s hotel consultants can help monitor for any other properties that need

to be removed.

n Refine instructions. Buyers should review their rate loading instructions each year. Something as simple as neglecting

to update them to reflect this year’s rate code can cause the organization to spend more than it should on hotels until

the error is caught in an audit. Also, continually seek ways to simplify the instructions for hotels, particularly when working

across regions with language differences, across GDSs, and more.

n Determine impact of non-LRA. For properties where the organization has accepted a non-LRA (last room availability)

rate, buyers should monitor post-trip data to determine how often travelers are able to book the corporate rate. If the

discounted rate is rarely available because the negotiated room type is sold out, buyers should try to determine whether

paying a higher rate for LRA would have been more cost effective, despite the fact that it can cost up to $40-50 more per

night than a non-LRA rate. This knowledge can be used to inform future negotiations. Open dialogue with the hotel should

also help identify whether the property is actually selling out frequently, or if another issue is causing the higher rates.

n Understand dynamic pricing’s effects. Similar to non-LRA, buyers using dynamic pricing in their hotel program should

closely monitor the overall impact to their rates vs. their previous negotiated rates. Hoteliers are keen to advance the

dynamic pricing model and therefore should be interested in whether buyers are satisfied with this option or not.

130 €

120 €

110 €

100 €

Africa Asia Caribbean Europe Latin

America

Middle

East

2012 ANR 1st Bid 2012 ANR Final Accepted Bid

North

America

Average Negotiated Rate (ANR) = Bid rates, breakfast & taxes

Source: 19 EMEA-based hotel consulting clients of the CWT Solutions Group; data represents 5,400 hotels and more than 2 million room nights

Pacific

n Audit year round. After the auditing process has concluded for the year, travel buyers should still do their own accuracy

checks periodically to ensure nothing has changed in the GDS, particularly in cities travelers visit most frequently. This can

be done by conducting a manual search of preferred hotel rates in the organization’s online booking tool and checking

them against the corporate contract.

n Seek traveler feedback. Early in the year is an ideal time to seek traveler feedback about preferred properties, particularly

on any hotels that are new to the program. While auditing is key to ensuring negotiated rates are available, additional types

of auditing can also be helpful to determine whether the booked rate was honored at the time of check-in. Sometimes it

is not for no particular reason, and this can result in additional costs of 6-12%. Finally, buyers must look at more than rates

alone. Travelers who actually use the hotels can provide feedback on the overall value received for the rate. Travelers can

also inform buyers of higher-than-negotiated rates more quickly than an audit typically can. While many external traveler

feedback sites exist, CWT can facilitate the collection and sharing of traveler feedback specific to properties in the managed

hotel program.

Copyright © 2012 CWT


12

Regional Spotlight: Asia Pacific

Regional Spotlight: Asia Pacific

13

Integration of non-GDS properties

next frontier for hotel programs

When an Asia Pacific-based oil and gas company wanted to

better integrate its unique lodging supplier into its managed

travel program, it worked with CWT to list the property in

the global distribution system (GDS) alongside traditional

hotels, despite the fact that the supplier does not participate

in the GDS. The incorporation of inventory for non-GDS

lodging represents a significant opportunity for better hotel

program management – and eventually cost savings – for

organizations in many industries.

For CWT’s client, providing its travelers easy and efficient access

to make reservations at a property that can best be described

as a remote camp site was critical, as the organization had an

existing agreement with the supplier that it needed to fulfill.

However, this independent property did not consider itself a

traditional hotel and therefore was not motivated to participate

in the GDS, a situation that previously prevented it from

showing up in search results conducted via online booking

tools or by travel counselors accessing a GDS.

The ability to negotiate likely represents the largest opportunity for buyers, who today mostly pay regular published rates at these

properties which are available to anyone regardless of total spend. Much like traditional hotels, many of these unique properties

have also been raising nightly room rates based on strong demand, and some do not include amenities like free breakfast.

Improved safety and security is another benefit associated with the use of this solution, as more comprehensive lodging data better

enables the organization to assist travelers in the event of a crisis.

Following are recommendations for travel buyers considering whether the incorporation of non-GDS content could benefit their

managed hotel programs:

Determine relevance. Travel buyers should understand whether non-GDS content represents a significant portion of

their current hotel spend. While data on these expenses may be harder to come by than for traditional hotels, an educated

estimate should be achievable by examining other sources, such as air and/or car rental data, or credit card spend

reported by corporate card suppliers.

Benchmark non-GDS vs. GDS rates. If possible, buyers should compare average room night rates at their non-GDS

properties vs. properties that participate in the GDS. The key difference will likely be that the organization has negotiated

discounted rates and some amenity inclusions with GDS-participating hotels, but not with those outside the GDS. The

difference in price will illustrate the potential savings available by beginning to get better data for use in negotiations with

non-GDS properties.

Communicate with travelers. When non-GDS hotels begin appearing alongside traditional properties, it can be confusing

to travelers. It is important to communicate what the changes mean and why they benefit the organization. Adoption of

this alternative booking method can likely be encouraged by targeting communication specifically to those travelers who

book non-GDS hotels most frequently.

Getting assistance with non-GDS hotel content

After beginning to use a product CWT launched globally in

2011 (see next page), the camp site now appears just like

any other “live inventory” in the GDS and is fully bookable

by travelers, which helps reinforce the company’s preferred

lodging option for travelers visiting that part of the region.

Better integration of non-GDS content can be important for a variety of organizations, particularly for those sending travelers to

remote areas where traditional hotel options are either limited or nonexistent. This often applies most significantly to sectors like oil

and gas, construction, and the government. Additionally, any organization with a large number of boutique or independent hotels

in its program would also benefit from this alternative, as these properties typically do not participate in the GDS either.

In CWT’s experience, non-traditional properties are generally willing to participate in CWT’s “workaround” process because it

provides them a reliable distribution channel for exposing their inventory to the client and gives them many of the benefits of

participating in the client’s preferred GDS without any of the associated costs. That said, participation may eventually create more

pricing pressure for suppliers, as clients gain access to more complete data on their total spend at these properties and can begin

leveraging it in negotiations, just as they do with traditional hoteliers.

Click here to view a video providing more information on CRS

by CWT, which enables the integration of non-GDS hotel content

Copyright © 2012 CWT


14 Regional Spotlight: Europe, the Middle East, and Africa

Regional Spotlight: Europe, the Middle East, and Africa

15

Hotel VAT increase in France equals

another price hike for buyers

The French government’s decision to increase the

value added tax (VAT) on hotel rooms to 7% beginning

January 1, 2012, complicated hotel negotiations for

many organizations this year, with most hoteliers and

travel buyers taking opposite positions on how the VAT

increase should be addressed.

Following this year’s hotel negotiations, the CWT Solutions

Group observed that most hotels came back asking

buyers to increase the final, agreed-upon rates by 1.4%

to compensate for the additional VAT that hotels are

now required to pay the French government. The CWT

Solutions Group fought back on the basis that all taxes are

already supposed to be included in the rate, and therefore

the last-minute change represented a lack of planning on

the part of hoteliers. Some clients continue to refuse to

accept an additional 1.4% price increase over the already

increased rates they are paying for 2012, effectively

extending negotiations into this year when they typically

would have concluded by the end of 2011.

Meanwhile, hotels argued that organizations can request VAT reimbursement from the government, since businesses are able

to recover VAT for items they buy related to conducting business, including corporate travel. For this reason, hotels believe that

passing the 1.4% VAT increase on to clients is reasonable. Even so, the process for seeking reimbursement is typically much more

complicated for companies that are not based in France, which comprises a large number of the travelers staying in French hotels.

The fact that hotels have the upper hand in negotiations this year (see “With 2012 hotel rates final, GDS audits begin” in this issue)

is clearly empowering them to attempt to pass through the entire VAT increase, rather than absorbing some of it themselves. These

conversations remain ongoing between the CWT Solutions Group and hoteliers, making it too early to tell whether clients will be

able to avoid incurring this additional cost.

This is a challenging situation for travel buyers. While it may be difficult to avoid this additional rate increase for 2012, following are

some suggestions for mitigating it throughout this year and in the future:

Look to offset the increase. While the 1.4% VAT increase may be hard to avoid, buyers can still request other concessions to

help offset this. If the hotel did not agree to a requested amenity or another desired contractual term during negotiations, now

is the time for the buyer to raise it again, as hotels have effectively extended the negotiating period by raising this increase.

Seek reimbursement. If French hotels make up a significant portion of the hotel program, it may be worthwhile to pursue

reimbursement for the VAT the organization is paying, despite the potential complications involved.

Plan for next year. Buyers should raise hotel VAT as a topic of conversation in 2013 negotiations to avoid any future

surprises. Also, buyers who agreed to an additional 1.4% increase this year should keep this in mind next year, and may want

to push harder for lower rate increases or additional contract concessions to help offset this year’s increases.

London Olympics fast approaching

With the Summer Olympic Games in London now just a

few short months away, travel buyers may be interested

to know that the London Organizing Committee of the

Olympic Games (LOCOG) recently released 120,000

hotel rooms, making them available to the general public.

These rooms represent inventory at about 200 properties

across all rating categories. Based on this, organizations

with business travel to London during the Games may

experience improved availability of hotel rooms, though

air travel, ground transportation, dining, and entertainment

will continue to be constrained and more expensive during

this time.

Given this, if travel to London is necessary during the

July-August time period, travel buyers may want to

revisit expected availability with preferred hoteliers that

may be part of the room block just released by LOCOG.

Alternatively, hotels on the outskirts of London, or outside

the city altogether, may have better availability and be

easier to reach than those closer to the Olympic activities.

Click here to access other recommendations on how to

navigate necessary business travel to London this summer.

France’s 1.4% VAT increase looks minimal compared with the 12% VAT increase the

government of Lithuania also implemented on January 1, 2012, raising it from 9% to a

significant 21%! Many of the same challenges and opportunities exist for buyers with

travel to Lithuania as are detailed here regarding France.

The increasing assessment of credit card surcharges by European airlines remains top of mind for many

travel buyers and continues to garner widespread media coverage. If you missed CWT’s examination

of this issue, and related recommendations, in the last issue of CWT Vision, click here to revisit this

important topic.

Copyright © 2012 CWT


16

Regional Spotlight: Latin America

Regional Spotlight: Latin America

17

Unique regional characteristics

impact LATAM’s travel landscape

As the Latin American region experiences significant growth economically, and subsequently in business travel, many travel

buyers based throughout the world may find themselves with responsibility for travel in this area. Like any other region, there

are some unique differences involved with managing travel in Latin America of which buyers must be aware to be effective. The

following outlines some of the most significant nuances, with much more Latin America-specific content forthcoming in future

issues of CWT Vision as we add this dynamic part of the world to our collection of Regional Spotlights in each issue.

Societal differences

In general, the pace of doing business in Latin America differs from many other parts of the world. Depending on where a traveler

is from, they may perceive it as slower than their home country. For example, Latin Americans are often regarded as knowing how

to enjoy life, with offices shutting down or holding parties to celebrate events like the World Cup tournament every four years. There

is also a heavy focus on building and maintaining relationships with business associates, with more than half of many meetings

often focused on personal exchanges, with the last few minutes dedicated to conducting business. Finally, like many other regions,

Latin America also encompasses many currencies, which can complicate a trip for travelers accustomed to using a single currency

across a large geographic area, such as the European Union or the United States.

High amount of non-GDS content

Latin American suppliers are extremely focused on minimizing the cost of doing business, which means that many hotels throughout

Latin America do not participate in the global distribution system (GDS), and most airlines in Brazil also do not. Due to consistent

high demand and full planes, Brazilian airlines have not found it necessary to distribute their inventory outside their direct channels.

Because Brazil is the largest country for travel in the region (60% of CWT clients’ travel to the Latin America region is to, from, or

within Brazil), this has a significant impact on the overall availability of full airline content in the region. This is a characteristic unique

to Latin America, which many non-resident travel buyers and travelers may not realize.

While some travel industry participants, including CWT, have created solutions that integrate GDS and non-GDS content into one place

for ease of booking, the high amount of non-GDS content hinders the proliferation of online booking tools (OBTs) and some mobile

technologies that enable travel bookings (see “Integration of non-GDS properties next frontier for hotel programs” in this issue).

Online adoption low

Incomplete GDS content is a key reason OBT adoption was just 21% for CWT clients in Latin America at the end of 2011, as the

largest OBT providers in the world struggle with this issue. Also, none of the large OBTs are completely available in Brazil today,

though many have indicated that their ability to serve that market is a top priority. Also, as described below, cost savings from online

booking are more limited in Latin America because full automation is not possible given credit card security requirements. Finally,

many travelers are accustomed to high-touch service and continue to resist booking their own travel online.

Cash-based economy

Unlike in many parts of the world, credit cards are not prevalent in Latin America, largely because of security concerns and strict

government regulations. In most cases, only a company’s top executives can carry a corporate card to pay for travel purchases –

cards for individual travelers are not allowed by the government. In countries like Venezuela, those who do have credit cards are

restricted to a low spending limit that can make them ineffective for covering business travel expenses, such as flights and hotels.

Due to security concerns, credit card information is typically not stored electronically,

such as in a traveler profile, as it is in other parts of the world. In fact, most of the

time a credit card is used, the cardholder or vendor typically must contact the bank

to get approval for each purchase, and the 3-digit security code on the back of each

card is almost always required.

For these reasons, several businesses in Latin America are conducted using cash. In

fact, many hotels (typically outside main cities or suburbs) and most taxis throughout

the region accept cash only. Therefore, many business travelers get a sum of cash

from their organization before they travel, and use it to pay for expenses during their

trip. After their trip, travelers must return the unused cash and file expense reports

justifying the cash that was used.

High-touch service expected

It is still common in countries like Brazil and Colombia for business travelers to

receive a “meet and greet” service when they arrive at their destination, where

greeters welcome them, assist with their luggage, and help them with their airline

connection or to reach their ground transportation. In many cases, this is a courtesy

provided to meet the high-touch service expectations of some travelers. In other

cases, this is part of additional security provided by the travel management company

(TMC) and its partners. Many global organizations are willing to pay an additional

cost to provide this added level of service and safety for their employees, particularly

executives. However, also for security reasons, many airports throughout Latin

America continually seek to limit the number of non-traveling individuals present at

the airport, which can cause challenges to providing this type of service.

LAN-TAM merger

update

As the first quarter of the year

comes to a close, the creation

of LATAM Airlines Group, the

world’s third-largest airline

resulting from the merger of

Chile’s LAN Airlines and Brazil’s

TAM Airlines, should be finalized,

according to announcements

when the merger was approved

in late 2011. Once operational,

the newly combined airline

is expected to fly to 115

destinations throughout 23

countries worldwide. Stay tuned

to future issues of CWT Vision

for insight into this merger as it

develops, including advice for

travel buyers working with either

of the legacy carriers or the

newly combined airline.

Another high-touch aspect of travel in Latin America is the fact that most travel reservations are completed by travel arrangers, not

travelers themselves, as many employees at all levels of an organization have access to assistance from support staff. This applies

to bookings made over the phone with travel counselors, as well as to the limited number of trips booked online.

Driving is complicated

Traffic congestion represents a significant challenge for getting around as a business traveler in many parts of Latin America. Transit

time of up to two hours is not uncommon for getting from a hotel to the airport or to a meeting, based on many residents owning

their own cars and not enough roads to keep up with the increase in traffic in recent years.

In an attempt to relieve some of this congestion and alleviate the associated environmental pollution, many local governments

have imposed restrictions to limit the number of cars on the road at the same time. For example, license plates containing certain

characters are allowed to drive some days and/or some hours within the day, but not others. In other cities, access to financial

districts is limited some days of the week. Meanwhile, in Mexico, the newer a car is, the more days it is allowed to drive, as it is

assumed to be more environmentally friendly. Not surprisingly, this complexity greatly limits car rental as a viable option for any

business traveler, especially one not from the region.

Jair Suarez

Vice President, Global Sales and Program Management, CWT Latin America

Jair leads CWT’s sales and program management teams in Latin America, one of CWT’s fastest growing markets. He has been with

CWT for seven years, and previously has held roles with Delta Air Lines, American Airlines, and Sabre Travel Network. Jair is based in

Bogota, Colombia.

Copyright © 2012 CWT


18 Regional Spotlight: North America

Regional Spotlight: North America 19

Opinion:

Influence, not

control, will move the needle

As a member of the travel management industry, unlike most travelers I understand the reasons behind the things I’m asked to

do for the good of the organization while I’m out traveling. This can cause some internal conflict, as I often find myself grappling

with my heightened awareness of how my decisions impact the company in big and small ways, countered by my desire to

get home as quickly as possible after being away. As a travel buyer and traveler yourself, I’m sure you often find yourself in the

same boat and can see both sides: what the company wants to meet its goals, vs. what the traveler wants to meet his/her goals.

Like me, I’m sure you’ve also been reading a lot of opinions questioning the long-term effectiveness of traditional travel policies,

and attesting to the fact that travel buyers are losing some of their control while travelers are gaining more power over travel

purchasing. While it’s not what many in managed travel like to hear, I can attest that these statements are true – I’ve been

observing this trend among many of the clients with whom my team and I interact every day. As a travel buyer, I imagine you may

be struggling with this yourself, perhaps wondering how to maintain the integrity of your travel program in the face of all the direct

messages your travelers are receiving via technology and alternative booking channels.

It is a well-established fact that travelers have never had more access to travel-related information than they do today, with the

ability to make actual bookings instantly at their fingertips through mobile applications (apps) and internet access. They also have

access to more choices from an ever-expanding field of non-traditional suppliers. And, by all accounts, this will only increase as new

suppliers enter the market and as the use of tablet computers rises, further advancing individuals’ access to information on the go.

All of these options provide travelers proactive, immediate, and contextual information they can use to make decisions that

improve their travel experience. In stark contrast is the traditional travel policy, which is static, requires travelers to go seek it out,

and applies one set of rules regardless of the situation. No wonder the travel policy has been getting challenged! That doesn’t

mean it doesn’t have a place. It will likely always be a foundational element to support the travel program, but it cannot be relied

upon as the “be all, end all” for managing travelers.

When it comes to dealing with the now-constant flow of information to which travelers have access, some organizations I’ve

encountered are taking one of the two available extreme approaches: either they are trying to completely control travelers’ access

to information by only allowing the use of certain apps and continuing to push compliance to a lengthy travel policy document,

or they are enabling a total “free for all,” letting travelers book whatever and however they want, and not necessarily considering

the serious implications to preferred supplier agreements and safety and security provisions.

I tend to believe the most effective approach lies somewhere in the middle of these two extremes. Rather than attempting to

control traveler behavior, travel buyers should seek to harness the energy and entrepreneurial spirit of the empowered traveler to

make smart decisions while on the road. Put another way, rather than futilely trying to fight the flow of information, travel buyers

should be enhancing it by educating travelers at every step of the process, making them aware of the impacts to the organization

of both good and bad decisions.

Not enough travel programs are doing this today. A traveler may receive a message telling them they’ve booked a non-preferred

airline and that they should go change their reservation, but a different and more effective message would help the traveler

understand the implications of their booking. To the traveler, the flight times with the non-preferred carrier may have been more

convenient and the price may have appeared the same or only slightly higher – justifying their decision, right?

A simple “hand slap” message would miss the opportunity to help the traveler understand the additional benefits the organization

may have negotiated with the airline to make the total cost of flying much lower than other options, or the fact that the organization is

approaching its annual deadline to meet a market share agreement with the preferred carrier, and missing it could cost the company,

say, $1 million in discounts next year.

If you give travelers the benefit of the doubt and assume they want to do what’s right for the company (within reason), you quickly

realize the power that this type of education can have in terms of redirecting traveler behavior. I think that can be a powerful combatant

to the constant stream of messages and marketing they may be receiving via their smartphone. Now, you’ve educated and influenced

the traveler – no need to try to control them, especially when you really can’t, anyway. My team and I are convinced this represents a

relatively untapped opportunity in travel management, and are currently developing a traveler scorecard to enable our clients’ travelers

to better understand the overall impact their travel has on the organization, based on each and every decision they make.

Sure, there will always be those travelers who show complete disregard for the travel program and spend the company’s money

however they please, but I believe there are significantly fewer of them than many of us tend to think. I also don’t think those are

the people who most organizations would choose to send out into the world to represent their company in the first place. Another

policy improvement opportunity I see is to customize travel policies by traveler type. I’m not talking about special privileges for

vice presidents and above, which already exists at most companies. I’m referring to a little more leniency for the company’s most

frequent travelers. In the past, we looked at the road warrior population as the place to drive the most compliance benefits, given

that, generally speaking, 20% of travelers often drive about 80% of the total travel spend.

However, I would argue it makes more sense to focus cost savings efforts on the infrequent business traveler, who can likely afford

to be inconvenienced a little more during their travels, perhaps by having to take a connecting flight instead of a more expensive

direct option, because travel represents a small fraction of their overall time. Further, as organizations strive to retain top performers

and enable them to be as productive as possible on the road, I believe giving this group a little more leeway (again, within reason)

is absolutely worth the little bit of extra expense that may be incurred, whether it means allowing them to stay at a slightly more

expensive hotel that happens to be closer to the office where they’ll be conducting business, or enabling them to upgrade the size

of their rental car for increased comfort. Don’t forget, planes, hotels, and even cars represent this group’s “office” most days of the

year. As someone who travels several times a month myself, I can attest to the road warrior’s desire for quicker and more convenient

travel – the only luxury I’m seeking is more time, especially when I’m trying to get home after a few days away from my family.

Some in the travel industry are already doing this well – for instance, airlines for years have recognized that perks and conveniences

should be awarded to travelers based on frequency of travel, not their rank within an organization. You don’t need to be a highranking

corporate official to earn top status with an airline; you just need to travel a lot. The U.S. Transportation Security Administration

has figured this out as well, with their beginner, intermediate, and expert traveler security lanes and expedited screening initiatives,

all aimed at providing increased convenience for those who travel most often. You’ll be hearing us talk more in the future about

segmenting travel policies to make them more effective. For now, I hope I’ve left you with some food for thought on what the next

phase of travel management might look like for all of us. As my team and I continue to think through these ideas, I’d love to hear

your thoughts as well – please email me anytime.

Joel Wartgow

Senior Director, CWT Solutions Group – Americas

Joel is responsible for setting the strategic direction and sustaining the performance of a team of more than 45 CWT consultants.

He has been with CWT since 2005 and has more than 16 years of travel and hospitality industry experience, including with Marriott

International and The Walt Disney Company. Joel is based in Minneapolis, Minnesota, USA.

Copyright © 2012 CWT


20 Indicators

Indicators

21

As the price of fuel has fluctuated, sometimes drastically, over the past year, many airlines have expanded the practice

of assessing fuel surcharges in addition to the base fare for certain airline tickets. This new Indicator chart is intended

to provide travel buyers clarity around the current state of average fuel prices and airline fuel surcharges, and illustrate

the ongoing evolution in the relationship between the two.

Relationship between oil prices and airline fuel surcharges

130

US$

1600

1400

1200

1000

800

AVERAGE TICKET PRICE

Europe, Middle East & Africa - Percentages indicate the variation of Q4 ’11 vs. Q4 ‘10

ECONOMY

+1%

US$

5500

5000

4500

4000

3500

3000

BUSINESS

+7%

120

110

100

90

Fuel Index

Domestic

Intercontinental

Continental

Total All Airlines

600

400

200

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

+1%

+7%

2500

2000

1500

1000

500

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

+5%

80

Domestic Continental Intercontinental Continental Intercontinental

70

100 112 108

104

2011 Q1

2011 Q2

2011 Q3

2011 Q4

North America - Percentages indicate the variation of Q4 ’11 vs. Q4 ‘10

NOTE: The monetary reference in this chart denotes Euros.

US$

1400

ECONOMY

US$

5000

BUSINESS

1200

+8%

4500

4000

+9%

1000

3500

800

3000

+12%

2500

600

400

+7%

2000

1500

+4%

200

1000

500

0

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

Domestic Continental Intercontinental Continental Intercontinental

Source – fuel surcharges: Amadeus global distribution system

Source – fuel price information: U.S. Energy Information Administration

Encompasses all classes of service for 12 legacy carriers with headquarters in every region of the world

Domestic = travel within any given country

Continental = travel originating in any given region to international destinations within that same region

Intercontinental = travel originating in any given region to destinations outside of that region

Values have been recalculated using flat exchange rates to eliminate artificial price variations

Copyright © 2012 CWT

Source: CWT client data, worldwide on top 20 round-trip routes

Domestic = travel within any given country

Continental = travel originating in any given region to international destinations within that same region

Intercontinental = travel originating in any given region to destinations outside of that region

Top 20 round-trip routes: 20 most frequently purchased round-trip routes per category (domestic, continental, intercontinental) & per region, based on 2010 and 2011 CWT ticket sales

Values have been recalculated using flat exchange rates, versus previous editions of this publication, to eliminate artificial price variations.

Copyright © 2012 CWT


22 Indicators

| Q1 2012

23

AVERAGE TICKET PRICE

BUSINESS & FIRST CLASS USAGE

Asia Pacific - Percentages indicate the variation of Q4 ’11 vs. Q4 ‘10

Europe, Middle East & Africa

North America

US$

1200

1000

800

600

400

ECONOMY

+10%

+3%

US$

5000

4500

4000

3500

3000

2500

2000

1500

BUSINESS

+0%

-3%

%

50

45

40

35

30

25

20

15

%

50

45

40

35

30

25

20

15

200

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

+4%

Domestic Continental Intercontinental Continental Intercontinental

1000

500

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

10

5

0

2010 Q4

2011 Q1

Continental

2011 Q2

2011 Q3

Intercontinental

2011 Q4

10

5

0

2010 Q4

2011 Q1

Continental

2011 Q2

2011 Q3

Intercontinental

2011 Q4

Latin America - Percentages indicate the variation of Q4 ’11 vs. Q4 ‘10

Asia Pacific

%

50

Latin America

%

50

US$

1600

ECONOMY

US$

5000

BUSINESS

45

40

45

40

1400

1200

+25%

4500

4000

3500

+20%

35

30

25

35

30

25

1000

3000

20

20

800

2500

15

15

600

400

200

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

+21%

+20%

2000

1500

1000

500

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

+26%

10

5

0

2010 Q4

2011 Q1

Continental

2011 Q2

2011 Q3

Intercontinental

2011 Q4

10

5

0

2010 Q4

2011 Q1

Continental

2011 Q2

2011 Q3

Intercontinental

2011 Q4

Domestic Continental Intercontinental Continental Intercontinental

Source: CWT client data, worldwide on top 20 round-trip routes

Domestic = travel within any given country

Continental = travel originating in any given region to international destinations within that same region

Intercontinental = travel originating in any given region to destinations outside of that region

Top 20 round-trip routes: 20 most frequently purchased round-trip routes per category (domestic, continental, intercontinental) & per region, based on 2010 and 2011 CWT ticket sales

Values have been recalculated using flat exchange rates, versus previous editions of this publication, to eliminate artificial price variations.

Copyright © 2012 CWT

Source: CWT client data, worldwide

Continental = travel originating in any given region to international destinations within that same region

Intercontinental = travel originating in any given region to destinations outside of that region

Copyright © 2012 CWT


24 Indicators

AIR BOOKINGS MADE 14+ DAYS IN ADVANCE

Europe, Middle East & Africa

North America

%

80

%

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

Domestic Continental Intercontinental

Domestic Continental Intercontinental

Asia Pacific

%

80

Latin America

%

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

0

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

2010 Q4

2011 Q1

2011 Q2

2011 Q3

2011 Q4

Domestic Continental Intercontinental

Domestic Continental Intercontinental

Source: CWT client data, worldwide

Continental = travel originating in any given region to international destinations within that same region

Intercontinental = travel originating in any given region to destinations outside of that region

Copyright © 2012 CWT

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