Market Overview

Spring Offers Opportunity to Build Traveler Engagement Programs; Advito Predicts Modest Rise in Global Hotel Rates and Stable Airfares in 2017 Industry Forecast Update

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The spring travel outlook brings good news to global corporate travel
and procurement departments, according to the quarterly
update
to Advito's 2017
Industry Forecast
, issued last fall by the travel industry's most
progressive consultancy. There are new opportunities to strengthen
traveler engagement programs; airfares will fall or remain flat in most
market segments; and expected rises in hotel rates have diminished in
some markets, with lower prices now predicted for the Middle East.

"While there is relative travel price stability around the world, it's
an ideal time for companies to turn their attention to other ways to
impact travel program performance besides supplier management and policy
changes. It's time to influence traveler behavior by applying tried and
true digital marketing practices to your travel program," says Vice
President Jeroen Hurkmans. Travel managers should be using the same
tactics on their travel programs that retailers use to influence
consumer behavior.

"Just as every travel program has a business plan, it should also have a
marketing strategy specifically designed to support those goals," says
Advito Principal and Vice President Bob Brindley. "That marketing
strategy should not only push information to travelers to help them make
better buying decisions, but also solicit their feedback. Travelers are
more likely to engage with a program that makes them feel valued and
listens to their feedback."

The consultancy's parent company, BCD Travel, developed a white paper, "Get
Engaged: Empowering Travelers to Make Smart Buying Choices
," that
offers additional information.

In addition to spotlighting opportunities around traveler engagement,
Advito's March Update addresses specific global travel trends for hotel
and air:

Hotel Trends

Advito changed its hotel rate forecasts for three regions:

  • In North America and Africa, the upper limit for the forecast range
    has been lowered, meaning prices should not rise as much as previously
    anticipated.
  • In the Middle East, softer demand is coinciding with increasing
    supply. With rates now expected to decrease in Oman, Qatar, Saudi
    Arabia and the U.A.E., Advito changed its rate outlook for the region
    from a previously predicted rise of 2% to 4% to a drop of -3% to -1%.

Overall in the hotel sector, these revisions offset one another and the
global rate outlook remains the same.

Air Trends

Global air travel demand continues to strengthen, with traffic growth
hitting a 10-month high of 8.8% year-over-year in December 2016,
according to IATA. A pick-up in the economic cycle is supporting
international air travel, although the performance of key domestic
markets is mixed. The capacity growth that low oil prices encouraged has
pushed down average fares in many markets. Airlines are trying to
stabilize prices, and may soon resort to capacity adjustments to get
some upward movement in pricing in 2017.

  • Notably, Advito lifted its prediction for regional business travel
    fare increases to 2% for North America and the Middle East. It also
    revised its outlook for Latin America intercontinental economy fares
    to a 1% decrease.
  • In the Middle East, per the original forecast, airline expansion will
    ensure that economy fares fall this year. Yet due to strengthening
    demand, Advito has adjusted its regional business fares forecast for
    this market, changing the predicted rise from 0% to 2%.

Economic Growth

The outlook for the world economy is holding steady. A small improvement
in the outlook for advanced economies has offset a downgrade in growth
forecasts for some emerging markets.

Oil Prices

The original oil price assumption of US$50 per barrel has not changed.

About Advito

Advito is the travel industry's most progressive consultancy, enabling
procurement leaders to modernize their approach to managing the travel
and meetings spend category. Led by a unique team of multi-disciplinary
experts and thought leaders, we work with both clients and suppliers to
push the boundaries of traditional air and hotel sourcing and strategic
meetings management for higher program returns. We provide advisory,
procurement and outsourcing services in the area of corporate travel
sourcing, expense and meetings management, along with RFP development
and management; benchmarking and vendor management services. We minimize
our clients' travel spend and maximize their travel program value in a
data-rich, consumer empowered world. Headquartered in Chicago, Advito
operates in key business markets around the world. For more information,
visit www.advito.com.

About BCD Travel

BCD Travel helps companies make the most of what they spend on travel.
For travelers, this means keeping them safe and productive, and
equipping them to make good choices on the road. For travel and
procurement managers, it means advising them on how to grow the value of
their travel program. In short, we help our clients travel smart and
achieve more. We make this happen in 108 countries with almost 13,000
creative, committed and experienced people. And it's how we maintain the
industry's most consistent client retention rate (95% over the past 10
years), with 2016 sales of US$24.6 billion. For more information, visit www.bcdtravel.com.

About BCD Group

BCD Group is a market leader in the travel industry. The privately owned
company was founded in 1975 by John Fentener van Vlissingen and consists
of BCD Travel (global corporate travel management), Travix (online
travel: CheapTickets, Vliegwinkel, BudgetAir, Flugladen and Vayama),
Park 'N Fly (off-airport parking) Parkmobile International (mobile
parking applications) and Airtrade Holland (consolidating and
fulfillment). BCD Group employs over 13,000 people and operates in 100+
countries with total sales of US$ 25.4 billion, including US$ 10 billion
in partner sales. For more information, visit www.bcdgroup.com.

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