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KLM attempts to make waiting for flight less boring

KLM and a group of creative developers and designers have worked on a “fun AR (augmented reality) trivia game” in order to make waiting for flight less boring for its passengers. The game focuses on its passengers’ travel destination.

The Ready For Boarding layer was created for KLM (Royal Dutch Airlines), and based out of Amsterdam’s Schiphol International Airport. It keeps live data of Schiphol’s flight schedule, so one can choose the exact flight one is taking and answer trivia questions about destination that appear as 3D objects in AR.

The company has used Layar’s mobile augmented reality platform for this game.

Players receive points for the number of questions answered correctly in the allotted time.

Users can play the game from anywhere, but currently the flights are only aligned to Schiphol airport.

This game is initiated by KLM, Amsterdam Airport Schiphol and AR Lab.

This AR experience is supported with visuals of young Dutch designers from the Royal Academy of Art from The Hague. The Ready For Boarding layer is a collaboration between developer Håvard Kindem from Norway’s Fallen Leaves Interactive, Yolande Kolstee and Wim Van Eck from the ARlab in Den Haag, Simon McCallum from Gjøvik University College in Norway, Klaas Lageveen from Werp in 's-Hertogenboch, and Jordy van den Nieuwendijk at The Royal Academy of Art in Den Haag.

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Placing the customer at the heart of revenue management

Revenue management, with its roots in the airline industry, was traditionally based on capacity. However, by 2000, its application in the hotels sector was proving not to be as effective as hoped. Today, it is price management based on many factors that is superior to revenue management based on capacity, according to Amadeus, which has developed a spotlight paper outlining its vision of revenue management.

Looking forward, it is the complete integration with multiple systems and an approach more aligned to CRM which is what hotels of the future need.

Excerpts from Amadeus’ article:

The importance of price management not just revenue management

Price management thrives in an environment where revenue management does not. It is possible to realise a vision of a market tied to customer personalisation in place of more limited customer segmentation. It is possible to move effectively from just inventory management to channel management. By discarding the traditional capacity allocation models inherited from the airline industry it is now possible to address, at a macro-scale, the pricing issues that hoteliers are facing, and at a micro-scale provide pricing solutions, including dynamic pricing, real-time group quotations, with more granular competitive intelligence. And this enables systems to reveal many more opportunities for increasing revenue for hotel companies.

With dynamic price management techniques hotel rooms can be filled at the most profitable price according to learned demand patterns. By looking ahead using future booking data, and back with detailed historical records, advanced forecasting models can make intelligent rate and inventory recommendations. This can be done in real-time, adjusted dynamically to changes in the hotel environment, ensuring accurate and reliable ‘always on’ business intelligence.

Beyond revenue management

“We live in an exciting time where the speed and breadth from which we are receiving data opens whole new possibilities regarding to revenue management. We can expand our data collection beyond the PMS and really start to abandon old archetypes we’ve used to pigeonhole consumer behavior patterns used for our revenue management strategies. Imagine optimisation techniques where you’re holding inventory for soccer moms from Tennessee or setting pricing tiers for iPad users searching long tail keywords on Google. The rapidly growing availability of information will eventually allow us to paint pictures of our customers with striking accuracy. Those who’ve developed or implemented the systems and processes to take advantage of the multitude of data sources will have a very real competitive advantage,” Andy Grinsfelder, Director of Business Intelligence & Marketing Technology Services, Delaware North Companies Parks & Resorts, Inc.

In essence, the fixed, disconnected and disparate model of revenue management has now been overtaken by the fluid, dynamic model of price management, and this multi-variable model works much more effectively with the complexities of the hotel industry. By employing price management techniques hotel revenue can see improvements of up to five per cent which is a convincing argument for any hotelier worried about how best to survive in an ever more competitive marketplace.

In many ways what we are looking at are models that share a lot with sophisticated trading systems. Like the rocket scientists who analyse price movements in a trading market, today’s systems also look at markets and try to establish the influences on a price point within that environment. By using a combination of elegant algorithms and the sheer force of computational power to predict where that price is likely to move in the near future – the Holy Grail of trading – and make the most competitive offering available. The technology really is affording us this deep look at both when and where a customer is, and this environment will come to be dominated by whoever has the biggest computing engine, the most effective systems and the capabilities to effectively merchandise the hotel product.

Where is the future headed?

“We see three key areas for development in the coming years: (Managed) Automation - increasing automation in order to free up analysts for more strategic actions and decision-making; PSRM (Price Sensitive Revenue Management) - emphasis must be on utilising the huge amount of rich data available online; and, CCRM (Customer Centric Revenue Management) - this should be linked to the above and requires coordination between revenue management and CRM systems,” Darryl Piggott, Pricing and Yield Manager, Center Parcs Limited.

‘When’ and ‘where’ are good, but it is possible to think further – to look at ‘who’, that is, the individual preferences of a customers. Technology is allowing a greater focus on individuals and helping hotels to better cater for their personal preferences. By analysing booking and stay data in detail and moving beyond traditional segmentation to personalisation, of channel bookings, lead times and combinations of rates and activities, the prospects for driving up revenue whilst retaining guest loyalty are significantly improved.

This goes beyond revenue management, and beyond price management, to become customer-centric revenue management, a very close cousin of Customer Relationship Management or CRM. This is akin to the Facebook of travel, in which the ‘atom’ of processing is not the time or place, but the person. What could be lost in the quest to create dynamic pricing models that take everything into account except the individual, can be regained with this approach.

So for example, if you are booking a hotel room through such a system, it will recognise that you like golf and Chinese food and recommend local golf courses and restaurants. It might know that you generally like to hire a car, so it will offer car hire company options as a package. It could even choose the type of car you prefer. And the system can even charge a premium for these services, so that while the customer benefits from a uniquely tailored experience, the vendor also makes more money, whilst the customer feels more loved.

Now take a different season. Suddenly tennis is not as attractive, so the system needs to take this into account. How about a local shooting range? And instead of Chinese food, now that the customer is booking into a hotel in Europe, the system can recognise this and recommend local cuisine instead.

As we start to zero in on the customer we also start to ask interesting questions. For example, if systems are geared to the preferences of a small group or even to the level of the individual, how can the concept of brand value be incorporated? It is also important when we move beyond quantitative factors such as price, location and date, to start thinking about emotional factors around the service experience and the perceived value for the guest.

Towards a customer centric RM system: getting it right in a world of increasing expectations

This is critical in the hotel industry. While an airline operator will be looking at fairly limited competitors and alternatives to price, a hotelier is in an extremely tough market with many more competitors all adjusting their offerings based on seasonality and market demand. So in the hotels sector, absolutely the most important factor is becoming the hotel’s value proposition and brand, and how this is perceived by the customer alongside the competition. It’s not just about matching rooms to people or prices to segments, it’s about matching a hotel’s entire operations, from rooms, amenities, location, perceived quality and loyalty programmes, to the expectations of the right person in the right place at the right time. It’s a formidable logistical task and why deploying enormous computational power is critical to addressing this challenge.

Talk about customer-centric revenue management also acknowledges that revenue management is moving closer to marketing. And, in the same way marketing pervades an organisation and essentially sets its direction, so could and should customer-centric revenue management become integrated across a hotelier’s systems, throughout the distribution systems, from the point of sale through to after-sales follow-up.

Greater customer insights, and the proliferation of new channels for interaction with those customers such as email and social media, means it is vital to offer them the best possible deals for them as individuals rather than just their broad behaviours.

“The future of revenue management must be tied into gaining sustainable competitive advantage in our highly complex and diverse hotel business where the customer perception of value will be the king. Hoteliers will be required to focus on one consumer and their experience even when they serve 100 million consumers. In our opinion, the future vision of revenue management and distribution marketing is a day when each guest is a market segment of one and the access and availability of rates for a requested stay would depend on a guest's past history or forecasted future with the hotel or brand,” Puneet Mahindroo, Corporate Director of Revenue Management & Global Distribution, Taj Hotels Resorts and Palaces.

It’s probably fair to say that the movement from RM to PM (Price Management) to CRM is the result of a symbiosis between market competition, customer choice and technology. If the environment in which you work is becoming more complex, then make sure you have the right tools and technology to enable you to lead it. If the customer is becoming all-powerful, then it is important you know how best to meet their needs.

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“65% of marketers aren't even measuring leads generated from social media

Is the primary goal of your social media initiatives to generate more and more fans and followers? It shouldn’t be.

While increasing your social media reach is a great thing to aspire to achieve, more fans and followers are really just a means to an end. So what should you be hoping to achieve at the end through that increased reach? More traffic, leads, and ultimately customers, of course!

Unfortunately, the majority of marketers don't see it that way. According to Chief Marketer’s 2011 Social Media Marketing Survey, the number of friends, followers, and likes is the leading measure of social media success for 60% of marketers. In fact, only 35% of marketers said they track qualified leads from social media. This means that a whopping 65% of marketers aren't even measuring leads generated from social media. Eek!

 

What’s wrong with this picture? While social media adoption has continued to increase among marketers, it seems that many are at a loss for understanding what the true benefit is of participating in social media. Furthermore, Chief Marketer discovered that just 13% of respondents believed they were very effective at measuring their social media campaigns. Another 47% thought they were somewhat effective, 28% admitted they weren't very effective, and 12% confessed they weren't effective at all.

While yes, generating engagement is valuable, engagement shouldn't be the ultimate goal. Increasing engagement for the sake of generating more traffic, leads, and customers is. After all, if at the end of the day you have nothing to show for your increased reach, is the marketing effort even worth it?

Marketing Takeaway

How effective do you think your marketing team is at measuring the success of your social media campaigns? Are your specific social media goals appropriately aligned with your overall marketing goals?

Furthermore, evaluate whether the tactics you're using in your social media efforts are appropriately contributing to those goals. If the goal is to generate leads, focus on maximising your social media efforts for lead generation. Most importantly, as a marketer, it's critically important to effectively measure and track these results. Use marketing analytics tools to monitor traffic, leads, and customers from social media, and more granularly, specific social media channels like Facebook, Twitter, and LinkedIn. Understanding which site is producing the best results can provide you with powerful insights about where to focus your efforts and where to limit your time.

(By Pamela Vaughan, the article appeared as a posting on HubSpot Blog).

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How big data will change the travel industry

TIBCO Software, a provider of infrastructure software for companies to use on-premise or as part of cloud computing environments, has predicted how the ability to move large amounts of data, and the ability to process data in the cloud, will change the travel game significantly, not just for the consumer, but also in the back office as well.

The list is as follows:

• Metasearch will finally become “real search.”

• Trusted sources will emerge for quality data. The current so-called gatekeepers of data will lose their control of data sources.

• Entrepreneurs will develop new largely cloud-based services that don’t depend on the traditional restrictions.

• Travel will become more implicit and automated for mechanical trip buying (e.g. corporate travel). The user will not have to work so hard.

According to a posting on the company’s TIBCO Spotfire’s Business Intelligence Blog, moving travel apps to the cloud combined with the increased use of apps for the front end to the consumer, will push as never before the current process of concentrated processors of data. The travel companies that will be the most successful will use big data to understand and build trusted and reliable sets of services for the consumer.

Referring to EyeforTravel’s recent interview with Hopper CEO Frederic Lalonde, the company says it seems the travel industry is focusing on making the most of the data available because it is trying to tackle the problem and turn useless information into data that can improve the customer experience, and ergo, boost revenue and profits.

Hopper, a startup founded by a team of former Expedia employees, is developing a website for consumer travel discovery.

Hopper’s travel-oriented search engine allows users to discover destinations and products using only keywords. Hopper is applying cluster computing techniques to build the world’s largest database of travel information. The company is using Machine Learning, NoSQL databases and Big Data processing to transform raw web pages into structured and organised information, enabling a faster, more complete, and more flexible search than traditional travel sites. The folks at Hopper believe that the current technology used by travel companies doesn’t take into consideration the fact that planning and shopping for trips aren’t sequential activities, but rather they’re part of a consumer’s ongoing thought process discovery. Hopper is focusing on using big data to determine the relevant relationships among web content, travel products and everyday life so consumers can search by keywords—any keywords.

Additionally, data delivery via high bandwidth networks will also have a tremendous impact on the travel industry because travel companies require a significant amount of data and processing to deliver products and services. Because travel is so complex it requires a significant amount of horsepower that is better served via central location services or via the cloud, added TIBCO.

 

Product Development Strategies For The Travel Industry Conference   EyeforTravel is scheduled to conduct the first edition of Product Development Strategies For The Travel Industry Conference in London (November 3-4) this year.   For more info, click here   Or   Contact:   Marco Saio Global Events Director +44 (0) 207 375 7219 marco@eyefortravel.com   or   Tim Gunstone Managing Director +44 (0) 207 375 7557 tim@eyefortravel.com

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86pc of the UK Internet users visit a video site at least once a month

UK Internet users spend 240 million hours every month watching online video content, according to Experian Hitwise’s latest analysis.

In September 2011, the UK Internet population made over 785 million visits to online video websites - an increase of 36 per cent year-on-year.

The majority of growth in this space has been driven by YouTube, now the third most popular website in the UK after Google UK and Facebook. YouTube dominates with 70 percent of all visits to online video sites. Every month, UK Internet users spend 184 million hours watching YouTube content, with an average session time of 20 minutes.

Ranking second and third are the video-on-demand (VOD) services from BBC iPlayer and ITV Player, which now represent a significant percentage of overall Internet visits to video sites. Niche sites have also seen a huge increase in traffic, including videozer (+853 percent), MSN Video (+913 percent) and Hulu (+123 percent).

James Murray, Marketing Research Analyst at Experian Hitwise, said there are now more visits to video websites every month than to email providers, travel or sports sites, which represents a huge opportunity to the savvy marketer.

The average Internet user will make 18 visits to video sites a month and almost half will visit at least three different sites.

“While YouTube dominates the market, the increase in traffic to video-on-demand and more niche sites demonstrates that content is what matters most to today's Internet users and they'll go to whatever site has the content they’re most interested in viewing,” said Murray.

Strategy

On how can brands maximise the potential of online video, it was mentioned that a lot of this will depend on the overall digital strategy of the brand in question.

In its report, Online Video: Bringing Social Media to Life, Experian Hitwise says online video is such a diverse
and rapidly growing media that it can be used to build brand awareness, to bring more traffic to your website, as an educational tool to demonstrate a product or service, as a customer service and PR channel, or as a way to attract a completely new audience to your website.

“As people consume more video content online, brands should increasingly be looking to use video as a core part of their digital strategy. Online video is a very diverse media that can be used to build brand awareness, to bring traffic to a website, as an educational tool to demonstrate a product or service, as a customer service channel, or as a way to attract a completely new online audience.”

“Domino’s and British Airways are excellent examples of how brands can use YouTube as a customer service channel. Others, such as Yeo Valley, have created successful multi-channel advertising campaigns by repurposing TV adverts online, where the online advert had a potent effect in generating media awareness and enabled the company to reach a completely new audience.”

Capitalising on online video

Online video is a rapidly evolving medium and, as the amount of time that people spend online increases, video represents a great channel to deliver interesting content to a target audience. Social media and entertainment are the two biggest categories online and continue to grow in terms of online market share. By ignoring these channels, brands risk missing out on huge sources of Internet traffic. YouTube is now the third biggest source of traffic for all websites in the UK, accounting for two percent of all upstream visits to all categories.

People are drawn to online video sites for all kinds of content, predominantly entertainment, with music, TV, film and gaming being the most popular topics driving traffic to video websites. However there is an extraordinary variety of content being searched for as witnessed by the volume of searches around ‘how to’ videos.

Video represents a huge opportunity for brands to drive more traffic to their websites, to educate consumers or to attract new customers. Some brands have already realised the potential of online video and have used it to increase their website traffic, but the potential remains to exploit this growing channel more. The key, as with most things online is investing in innovative content that will inspire users to click through to your site.

“Android about-face proves the value of Google scrutiny”

The issue pertaining to Android users being harassed by the presence of apps that were locked into the phone and that were impossible to uninstall recently witnessed a movement. As per the information available, Google has confirmed that the Android 4.0 Ice Cream Sandwich update will let users disable any application, even those apps that the manufacturer and carrier preinstall as part of their business deals.

According to a report filed by CNET.com, the ability to shut down unwanted apps also extends to the browser and Gmail. The same report added: While you won’t be able to remove the app completely, disabling will keep the app from running and will remove the icon from the app tray and home screen.

Commenting on the development, FairSearch.org stated that when it comes to Google, it takes government scrutiny, like the Senate hearing, and thorough antitrust reviews to ensure Google plays by the rules and doesn’t leverage its monopoly power in the market to stifle fair and open competition.

Referring to the Senate Antitrust Hearing on the “Power of Google”, FairSearch.org recalled: Remember the back and forth between Sen. Al Franken (D-MN) and Google Chairman Eric Schmidt about whether Google Places was, in fact, an app?

It further added: “During that exchange, Schmidt incorrectly denied that that Google Maps (which includes Google Places) and other Google products are default applications that come pre-loaded on Android devices that users can’t remove (remember, Google’s counsel Susan Creighton had to correct Schmidt’s testimony at the start of her own).”

“One month later and Google has changed the model, ever so slightly. Users can now disable any unwanted preinstalled apps to keep them from running and remove them from the home screen, but they still can’t be removed completely.”

“Baby steps, perhaps. But it does show the power of government scrutiny of Google’s business practices.”

“Remember, Google was scraping content from Yelp! and TripAdvisor to build traffic for its own Google Places product until late July. Google only stopped the practice (which it hasn’t acknowledged was wrong, or committed to not do again) after both companies raised the issue publicly for the better part of a year, and each credits antitrust reviews by the Justice Department and Federal Trade Commission with moving Google to change its behaviour - not to mention investigations by several state attorneys general.”

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Letting travellers explore destinations by mere shaking of their mobile phone

KLM recently came up with a new app, TripShake, for iPhone and Android users as part of its plan to strengthen its multi-channel strategy.

The app gives users a fun way to explore the many possibilities for their next trip. And by just shaking the phone, a KLM destination will pop up, along with a ticket price.

The TripShake App now offers the option to explore future destinations via a mobile phone, where and when it suits the user.

The app gives the option to select a continent and travel dates. All options can also remain open. By shaking the phone, one of over 100 destinations will appear. For more suggestions, one can shake the phone again and again, until the perfect destination has been found. Along with the destination, the lowest fare for a return flight will show. The outcome can be shared on social media or the flight can immediately be booked.

The KLM TripShake App is available in Dutch, English and German.

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Enterprise encourages fans to share positive customer service stories

Enterprise Rent-A-Car is inviting its loyal customers to participate in its new “Thank You” Facebook contest by sharing stories and photos of positive customer service rental car experiences.

The contest has been created in response to customers who contacted Enterprise to express interest in sharing their stories, shared the company.

By entering the contest, customers can claim the title of Enterprise’s “Most Passionate Fan” for a chance to win a weekend getaway every month for a year that includes free car rental and hotel accommodations.

Jim Stoeppler, director of marketing for Enterprise Rent-A-Car, said, “Customer service remains our company’s number one priority, and we encourage our customers to share these stories and photos throughout the contest.”

The company plans to read each and every submission as the team gears up to say 'Thank You' to some of its most passionate customers.

To enter the contest, Facebook users can click the "Thank You" tab in the left column of the Enterprise page. Once fans "Like" the page,, fans will have the opportunity to submit a story and photos about why they are passionate about Enterprise. Customers can enter once per round during the first five rounds of the contest. Each round lasts one week. Enterprise officials will select one entry each round to advance to the final round. In the sixth week, visitors to Enterprise’s Facebook page will be able to view and vote for their favourite among the top five stories to help determine the winner.

The grand prize winner will be announced on or about December 14, 2011.

The grand prize winner will win 12 Enterprise Rent-A-Car gift certificates that can each be redeemed to cover the base rental rate for a consecutive three-day period at participating locations, and 200,000 Hilton HHonors Points.

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Is Your Hotel SEO Strategy Google Panda-Compatible?

10 Metrics to Help Gauge Your Site’s SEO Health

Everyone knows that having a successful search engine optimisation strategy is crucial to your site’s overall success. But how do you know if your strategy is successful? The 2011 Google Panda Update imposed new SEO requirements that made many hotel websites obsolete. The new (and constantly-updated) algorithm encourages engaging and unique content, interactivity, and quick download speeds.

For many hoteliers, it is hard to look beyond revenue and site traffic as key performance indicators (KPIs). Three other indicators that are commonly benchmarked in the SEO process are organic SERP rank, total number of inbound quality links, and number of social media shares across Facebook, Twitter, and Google +1.

However, it is more important than ever to look beyond those five metrics to determine the true SEO success of your website. Because the Panda Update takes many more factors into account, there are ten other factors that serious SEO-ers evaluate when monitoring a site’s SEO health.

Time on Site – A user statistic gathered by Google through Google Analytics and Chrome, this metric tells search engines whether visitors are finding what they need on your site. Look at your average time on site through your analytics. If it is under a minute or two, you may need to tweak the information on your site.

Depth of Visit – This can be determined through your analytics and is measured in pages. Do visitors read your homepage and leave? Or are they browsing through your thoughtfully-organised navigation to find what they need?

Entry & Exit Points – Your analytics should offer some sort of path report that shows how the majority of visitors use your site. This should have a function where you can determine major visitor entry and exit points. If users are leaving too soon, find a way to redirect them to the information you want them to find.

Conversion Funnel – This ties in with entry & exit points. Are people navigating to the “fluff” sections of your site and missing the meat? You may want to reconsider your navigation structure to help guide people to conversions.

Bounce Rate – Bounce rate is measured as the percentage of people who arrive at your site and leave right away. A high bounce rate means that people are not finding what they are looking for. One important thing to keep in mind is true bounce rate versus overall bounce rate. Let’s say that someone arrives at your site, reads the full page they landed on, but don’t progress any further in the site and leave instead. This is not a true bounce because they read and interacted with that one page before leaving. This is why monitoring time on site in conjunction with bounce rate is important.

Newsletter Conversion Rate – Using analytics and tracking codes, you should be able to see the conversion rate for people receiving your emailers. If the rate is exceptionally low, you may want to reconsider what newsletters you are sending out, or what landing page you direct the recipients to.

RFP Conversion Rate – You should also be able to track information on your RFPs and forms. If people visit the landing page for your RFPs but do not complete the forms, reconsider both the information you provide and the information you ask for – a long form with multiple fields can sometimes deter people.

Google Places Listing – While these listings are not organic listings in and of themselves, they do play a role in how your site is organically ranked. A properly-optimised listing full of valuable information for searchers increases your presence in the eyes of Google. As they continue to change the layout of their SERPs, it may be combined with your organic listing and boosted to the top of the page.

Page Load Time – This can be determined by an online tool such as Pingdom. If your site is experiencing long load times, this may affect your bounce rate as people get frustrated and leave. Speak with your website developer about what could be slowing down the loading process; frequently it is an easy fix.

Number of Indexed Pages – You can test this by visiting Google and typing in site:http://www.website.com. However many “results” Google returns is how many pages Google has indexed for your site. While there is no baseline number that every site must surpass, keep a baseline knowledge of it so that you are aware if Google doesn’t index some pages that you publish, or for some reason you see a huge drop in total number of indexed pages.

Revenue, traffic, organic SERP rank, quality inbound links and social media shares are the main KPIs for a reason – they give a good picture of how your site is performing. However, if any of those metrics are off, or you are looking for a way to further develop a successful SEO strategy in the face of Google Panda, the ten additional metrics outlined above are a good starting point. Remember that none of these should be analysed in isolation; they are all related and, together, give a more in-depth view of your site’s SEO health.

(By Sue Wiker, Manager, Copywriting & SEO Dept at HeBS Digital).

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Business travel prices expected to increase conservatively next year

The combination of demand and effective travel supplier yield management is to likely push rates business travellers pay up across the board in 2012.

The need for companies to invest in business travel as a means to support business growth, as well as travel providers’ discipline in managing supply, will likely lead to increases in business travel prices paid worldwide in 2012, according to American Express Global Business Travel. Business travel rate increases are likely to be conservative in North America and Europe; however, Asia and Latin America are likely to see relatively higher increases as travel demand within and to these regions remains strong.

The has company released its annual American Express Global Business Travel Global Forecast. Highlights are as follows:

North America Airfare Projections

American Express expects steadfast capacity restrictions by suppliers will likely boost airline prices, even in the face of a potential economic slowdown, resulting in average low to middle single-digit growth in contracted rates for businesses next year.

Notably, business class airfares are expected to see the greatest increase in 2012 as airlines take advantage of business travellers needing to be on the road to secure new accounts and market expansion where opportunities exist. These increases will likely be true even if consumers opt to stay home in the face of a potential double-dip recession in Western markets as travel suppliers target business people with the classes of service and productivity-based amenities preferred by the frequent traveller community.

• North America Short Haul (Economy): 2 – 5 percent
• North America Long Haul (Economy): 0.5 – 3.5 percent
• North America Short Haul (Business): 5 – 7 percent
• North America Long Haul (Business): 3 – 5 percent

North America Hotel Projections

The low single-digit gains hoteliers were able to secure in average business travel rates in 2011 are likely to continue in the coming year as hoteliers seek to reach pre-recession room rate levels. Across the two primary business travel hotel categories of mid-range and upper-range properties, the Global Forecast predicts likely low single-digit increases in North America. Of note, metropolitan areas play a significant role in expected price increases which vary by individual city market.

• North America Mid-Range: 2.5 – 6.5 percent
• North America Upper-Range: 1.5 – 5.5 percent

“To mitigate price increases in hotel in 2012, travel managers could benefit from benchmarking rates by property tier and city as supply pipelines and travel demand vary by location,” said Christa Degnan Manning, director of Expert Insights research, American Express Global Business Travel. “Buyers should also carefully calculate and measure the value of employee productivity-enabling services provided by hotels such as Internet connectivity and business center usage, as hoteliers increasingly seek to remove these from contracted rates to drive their own revenue-generating opportunities in the face of low base rate gains next year.”

Car Rental Projections

Car rental rates in North America are expected to remain flat as a result of a highly competitive marketplace and excess capacity.

• North America Base Rates: (-1) percent – 0 percent
• North America Rate Per Day: 2 – 3 percent

“2012 is the year to aggressively target car rental contract negotiations as it promises the best opportunity for year-over-year savings in travel category management,” added Manning. “Similar to air and hotel, car rental companies are seeking to recoup average daily rate declines of the past few years with additional fees and services, so companies should particularly pay attention to mitigating those costs in ground transport by clarifying policies and educating their traveller populations on which expenses will be reimbursed.”

Europe, Middle East and Africa (EMEA) Airfare and Hotel Projections

Persistent economic anxiety underlies average low single-digit EMEA airfare predicted increases. However, travel volumes and capacity will likely vary throughout the region and result in a range of pricing changes, particularly by type of flight. For instance, long haul and business class travel is expected to see relatively higher increases over short-haul and economy as European business people go abroad to Asia and Latin America to capitalise on growth opportunities in emerging markets.

• EMEA Short Haul (Economy): 0 – 4 percent
• EMEA Long Haul (Economy): 2.5 – 5 percent
• EMEA Short Haul (Business): 1 – 4 percent
• EMEA Long Haul (Business): 3 – 7 percent

For corporate hotel rates in EMEA, the region is likely to see conservative increases; however, there will likely be declines in markets like Spain and Greece that are enduring particularly challenging economic conditions. This year the Global Forecast includes details for both upper-tier and moderate properties across 400 European, Middle Eastern and African cities, 273 more EMEA cities than included in the Global Forecast in years past.

• EMEA Mid-Range: 0.5 – 4.5 percent
• EMEA Upper-Range: 1 – 5 percent

Latin American (LATAM) Airfare and Hotel Projections

The combination of several strong economies in Latin America and consolidation among regional carriers is expected to push airfare higher overall for the LATAM region. However, country-to-country factors such as inflation and foreign exchange rates greatly impact expected pricing between destinations.

• LATAM Short Haul (Economy): 4 – 6 percent
• LATAM Long Haul (Economy): 3 – 5 percent
• LATAM Short Haul (Business): 6 – 9 percent
• LATAM Long Haul (Business): 5 – 8 percent

The LATAM hotel market is similarly bolstered by strong economies and is projected to have moderate increases at both mid-range and upper-range properties. Hotel occupancy and pricing for the region are primarily influenced by the strength of business hubs including Buenos Aires, Mexico City, Santiago, and Rio De Janerio.

• LATAM Mid-Range: 1 – 5 percent
• LATAM Upper-Range: 2 – 6 percent

Asia-Pacific (APAC) Projections

The APAC region continues to be a relative bright spot in an otherwise uncertain economic picture globally, and is expected to lead in business travel demand. As such, airfare is expected to increase significantly in the region on top of considerable jumps in prices paid in 2011.

• APAC Short Haul (Economy): 1 – 5 percent
• APAC Long Haul (Economy): 5 – 9 percent
• APAC Short Haul (Business): 2 – 6 percent
• APAC Long Haul (Business): 6 – 10 percent

“Overall the Asian market appears to be poised to continue on its growth track, and business travel activity is expected to remain strong as companies within the region and across the world send travellers there to capitalise on its economic expansion,” said Manning. “Accordingly, airfare in Asia Pacific is generally expected to rise next year, especially for long-haul flights.”

As with airfare, the increased volume of travellers in the Asia Pacific region, coupled with constrained capacity, is resulting in increased hotel rates. However, pricing fluctuations impact Asia Pacific as they do the rest of the world, with expectations for declines in some cities based on location-specific conditions. For example, Shanghai has abundant capacity, having added significantly for Expo 2010, so will likely see price declines.

• APAC Mid-Range: 6 –10 percent
• APAC Upper-Range: 6 –10 percent

“As more and more companies understand the importance of putting people on the road and its criticality to converting prospects, retaining clients, and ultimately driving growth, particularly in emerging nations, we expect to see travel prices go up,” Manning said. “As travel suppliers have learned their lessons of the past two recessions and add capacity carefully, managed travel programs have to help companies strike the balance between increasing budgets to keep up with price hikes and business opportunities while reviewing policies and tools to most cost-effectively support the productivity and engagement of employees needing to hit the road next year.”

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