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Archive Category: Studies

Understanding challenges associated with delivery of multichannel customer experience

A study, which looks at what the most successful multichannel companies are doing differently, has found that ‘mature’ companies have overcome technical challenges and are using a much wider range of data sources than other companies to understand the customer experience.

According to The Second Annual Multichannel Customer Experience Report, published by Foviance in association with Econsultancy, commitment to customer experience from the top of the organisation is regarded as a key requirement by just under half of companies (46 percent) surveyed, higher than for all other organisational attributes deemed to be important. More than half of responding companies rate themselves either as ‘excellent’ (21 percent) or ‘good’ (37 percent) in terms of internal buy-in at the top of their organisations. But only 26 percent of respondents say their companies have a well-developed strategy in place for improving customer experience, just a slight increase on 22 percent last year.

The research has also found that ‘complexity of customer experience’ is now seen as the greatest barrier to improving multichannel customer experience, overtaking ‘organisational structure’ since 2010.

“Companies that have benefited most from improving their multichannel customer experience are those that have recognised the importance of combining quantitative and qualitative customer insights. If your company isn’t already capturing ‘voice of customer’ via onsite surveying and social listening and integrating it with data from web analytics and search there has never been a better time to start,” said Richard Sedley, commercial director at Foviance.

Other findings from the 2011 Multichannel Customer Experience Report:

• Just over a quarter (28 percent) of companies say there is ownership of customer experience at board or ‘c- level’, but without full commitment across leadership teams. Almost a fifth of companies (18 percent) say there is ‘c-level ownership of the total customer experience’.
• The gap between mature companies and others is typically more pronounced for integration of digital channels, such website, email and internet advertising, into the overall customer experience.
• The gap is less obvious for offline touch points (for example retail outlets, direct marketing and events), with the notable exception of telephone support and sales where mature companies are way ahead of the curve.
• The research also shows how mature and ‘immature’ companies have a different perception of the attributes required for delivering a positive customer experience. Mature companies are far more likely than the least mature organisations to regard motivated and empowered staff and efficient customer service as being among the most important attributes.
• In contrast, immature companies are more focused on visibility of customer behaviour across channels and the need for a single or joined-up customer database.

In addition to this survey, Foviance carried out five consumer surveys about customer experience, covering retail, travel, online banking, mobile phone providers and gaming / gambling. It highlights that 69 percent of the 4,000 consumers surveyed have dealt with a company online and 73 percent of people would be likely to recommend a retail brand based on good customer experience.

According to consumers, the three most important attributes for a positive experience are ‘efficient customer service’, ‘low-priced products’ and ‘high quality products’. The relative importance of different attributes varies by sector, as does the frequency of overall interaction and use of different channels (including online and offline). Asked to rate their overall customer experience across different sectors, consumers are far more likely to rate their experience at the top end of the scale (as ‘excellent’ or ‘good’) than as mediocre (‘okay’), ‘poor’ or ‘very poor’. Comparing sectors, consumers are most likely to rate their overall experience with retailers as excellent (40 percent). They are also most likely to recommend retailers if they have a good experience.

In terms of the extent of online interaction, more than half of consumers have had dealings via their desktop computers with retail companies (69 percent), banks (58 percent) and travel companies (57 percent) over the last six months. Apart from the gambling and banking sectors, consumers are more likely to have had an online experience than an in-store experience during the last six months.

Consumers are most likely to have engaged with mobile phone and retail companies online via their phones (11 percent and 13 percent of consumers respectively). Single-figure percentages of consumers (across all five sectors) have had dealings with companies using tablets (e.g an iPad). It is likely that these percentages will increase significantly over the next few months. Consumers are most likely to have browsed retail websites using an iPad or other type of tablet (8 percent). While online experiences with companies are becoming prevalent, offline touch points are still vital, despite the shift to online. Just under a third of consumers (29 percent) have used a retail brochure or catalogue, while 17 percent have used a travel brochure.

Travel sector

In order to provide the best experience for you as a customer, what are the most important areas for travel companies to focus on?

Within the last six months, have you researched or browsed for a flight, hotel or holiday in any of the following ways?

Within the last six months, have you booked a flight, hotel or holiday in any of the following ways?

Would you be likely to recommend a travel brand based on good customer experience?

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Gen Yers have the highest uptake of smartphones: study

A study focusing on how technology behaviours vary across generations has indicated that younger generations are more active on social networks; however, of those Boomers who are using social media, a similar percentage has a Facebook account or a LinkedIn account as their younger counterparts.

The younger generations are far more likely to have a Twitter or MySpace account, though, according to Forrester’s annual The State Of Consumers And Technology: Benchmark 2011, US report (it segmented consumers by generation, examining Gen Z, Gen Y, Gen X, Younger Boomers, Older Boomers, and the Golden Generation).

The report focused on connectivity this year, analysing how different generations are using technology inside and outside the home and which devices do they use .

Findings:

• Gen Zers use the Internet wherever, whenever. Of course, for these 14.5 million US consumers, digital is the norm — they don’t know a world without mobiles or the Internet. More than four in five access the Internet outside the home, and two in three use the mobile Internet at least monthly.
• Gen Yers are the mobile generation. Gen Yers have the highest uptake of smartphones and are most likely to use the mobile Internet on their mobile. They use their mobiles for a wide range of activities, from playing games and listening to music to looking up directions. Two in three online Gen Yers fall into our SuperConnecteds Mobile Technographics segment.
• Gen Xers are comfortable with technology. Gen X is the largest generation, containing 52.3 million US adults, but it is the middle child in many ways. However, in many activities, Gen Xers closely rival or even surpass Gen Yers in adoption. For example, online Gen Xers lead in the ownership of entertainment-related devices like HDTVs, DVR devices and services, and 3D-capable HDTVs.
• Boomers embrace technology slowly but certainly. Although neither Younger nor Older Boomers are the first to embrace a new technology, they aren’t technophobes. About 60 percent of online Younger Boomers (those ages 46 to 55) access the Internet outside the home, and about a third own a smartphone. Also, about one in five online Older Boomers (those ages 56 to 66) uses the mobile Internet regularly, and about a quarter listen to the radio online.
• The Golden Generation is the generation that’s most left out. The Golden Generation consists of 16.6 million US consumers aged 67 or older and is the generation that’s slowest to adopt technology. But they will embrace technology when it’s relevant to them. For example, more than 60 percent of the online Golden Generation own a digital camera, 19 percent are SuperConnecteds (who use their mobile for a variety of activities), and 64 percent have purchased a product or service online in the past three months.

Overall satisfaction with hotel brands in Europe declines: study

Guests increasingly expect hotels to offer Internet access that is consistently available and working properly, particularly since Internet access is becoming more widely available in non-hotel settings, such as restaurants and cafes. The industry, according to a study, has reached a point where problems with Internet access will more severely impact guest satisfaction levels with each passing year.

According to the J.D. Power and Associates 2011 European Hotel Guest Satisfaction Index Study, for the first time, complimentary Internet access has surpassed complimentary breakfast as the most important amenity.

In addition, Internet use by hotel guests has nearly tripled during the past six years, with 47 percent of guests saying they used their hotel’s Internet connection in 2011, compared with 17 percent in 2005.

Hotel guests who are required to pay a separate fee for Internet connectivity are considerably less satisfied with costs and fees, compared with guests who receive Internet access for free or as part of their room rate. In addition, among guests who indicate they experienced a problem with Internet connectivity at their hotel, only 13 percent say they would return to the property for a future stay. In contrast, 28 percent of customers who did not experience a problem with the Internet say they would return.

Satisfaction with in Europe declines

Overall satisfaction among hotel guests in Europe has declined notably, with deterioration occurring across all levels of the guest experience, according to the same study.

The study, which examines the overall satisfaction of European hotel guests based on seven measures (in order of importance): guest room; costs and fees; hotel facilities; check-in/check-out; food and beverage; hotel services; and reservation, indicated that overall satisfaction averages 735 on a 1,000-point scale in 2011, down by 10 points from 2010.

While satisfaction has decreased across all measures from 2010, the largest decline occurs in the cost and fees measure. Cost and fees satisfaction averages 682 in 2011, down by 32 points from 2010. Cost and fees satisfaction in 2011 is comparable to 2009 levels (681). However, in 2009, overall satisfaction averaged 746—11 points higher than in 2011. This indicates that aspects of the guest experience outside of cost and fees have deteriorated considerably from 2009.

Stuart Greif, vice president and general manager of the global travel and hospitality practice at J.D. Power and Associates, said, “Hoteliers, like many businesses, are feeling the strain of trying to maintain lower cost structures until they see more sustainable levels of demand. There is danger, however, in allowing their product and service to continue to deteriorate. It is critically important that hoteliers focus on improving the guest experience. If not, they risk losing customers, market share and financial viability.”

According to Greif, increasing the frequency of guest interactions with hotel staff can help elevate satisfaction and loyalty. While nearly all guests interact with hotel staff at check-in, each additional interaction with a different type of staff member (e.g., housekeeper, manager, concierge), increases satisfaction by an average of 28 points.

Hotel rankings by segment are as follows:

Upper Upscale Segment

Steigenberger Hotels and Resorts ranks highest in the upper upscale segment for a fourth consecutive year, performing particularly well in all seven measures. Following in the segment rankings are Marriott Hotels & Resorts and Sheraton Hotels & Resorts, respectively.

Upscale Segment

Among upscale hotel brands, Hilton Garden Inn ranks highest in guest satisfaction and performs particularly well in four of the seven measures: guest room; hotel services; hotel facilities; and costs and fees. Following in the segment rankings are Riu Hotels & Resorts and Dorint Hotels & Resorts, respectively.

Midscale Segment

Ramada Hotels ranks highest in guest satisfaction in the midscale segment and performs particularly well in six of the seven measures: guest room; hotel facilities; check-in/check-out; food and beverage; hotel services; and reservation.

Following Ramada Hotels in the segment rankings are Holiday Inn and Park Inn, respectively.

Economy Segment

In the economy segment, Premier Inn ranks highest for a fourth consecutive year and performs particularly well in six of the seven measures: reservation; check-in/check-out; guest room; food and beverage; hotel facilities; and costs and fees. B&B Hôtels and Travelodge, respectively, follow in the segment rankings.

The 2011 European Hotel Guest Satisfaction Index Study is based on responses from more than 18,000 guests who stayed at a hotel in Europe between April and September 2011. The study was fielded between May and September 2011.

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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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Many suppliers will implement slight to moderate price increases in 2012: Egencia

Corporate travel experienced moderate growth throughout 2011 as companies continue to cautiously reinvest in this important aspect of their overall business, albeit with an ongoing focus on cost control and efficiency. This rebound in corporate travel is likely to continue into 2012, according to Egencia.

Egencia forecasts that many suppliers will implement slight to moderate price increases in 2012, coinciding with a limited increase in travel demand based on modestly improving market conditions.

Based on Egencia’s 2012 Global Corporate Travel Forecast, airline average ticket prices (ATPs) overall for business travellers to top business travel destinations are expected to be:

Slightly up (4%) for European points-of-sale
Slightly up (4%) for North American points-of-sale
Slightly to moderately up (6%) for Asia-Pacific points-of-sale

The hotel environment continues to show signs of year-on-year growth relative to increased corporate demand, resulting in improved hotel occupancy worldwide. In key destinations for 2012, Egencia forecasts average daily rate increases in:

Europe (up 2%)
North America (up 5%)
Asia-Pacific (up 7%)

“As of today, we haven’t seen business travel slowing down for our clients. During these uncertain economic times, companies remain cautious but, so far, haven't shown willingness to reduce overall travel spend. That being said, they are ready to take action if needed,” said Christophe Peymirat, Vice President, Global Marketing, Egencia. “The objective of our annual forecast is to provide companies with insights that can be leveraged to positively influence their 2012 planning and negotiations. So they can effectively save in the coming year.”

Europe Outlook

“Next year, air and lodging trends will be moving upwards, so the negotiating climate will be challenging for buyers,” said Germain Huber, Vice President Supplier Relations & Consulting, Egencia Europe. “That being said, there is still room for savings by leveraging the negotiating power of a TMC, booking airline tickets in advance, requiring pre-trip approvals or enforcing travel policies rigorously. And this is where Egencia technology turns out to be very helpful.”

ATPs

European businesses are slowly increasing travel demand both domestically and internationally; air prices for business travel will remain slightly up for flights to top business destinations with a few notable exceptions, including Paris, Marseille, Frankfurt, and Milan.

For full report, click here.

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iPad and Tablet users click on more search ads: study

A report has indicated that iPad and other tablet users tend to click on paid search ads at a higher rate than desktop or smartphone users.

According to Marin Software’s Paid Search Quarterly Benchmarking Report, compared to desktops, paid search ads targeted at tablet devices provide advertisers a 37 percent higher click through rate at a lower average cost. Although paid search ads directly targeted at tablets only comprises two percent of overall paid search spend, the click through rate (CTR) on tablets is 37 percent higher compared to desktops. Furthermore, advertisers targeting tablets like the iPad enjoy a lower average cost per click (CPC) compared to both desktops and mobile devices.

“As peoples’ desktop browsing habits carry over to devices like the iPad we anticipate advertisers will shift spend and ad strategy accordingly,” said Matt Lawson, VP of Marketing and Partnerships at Marin Software. “To achieve the best results, advertisers will need to develop specific programmes for each device type.”

Paid Search Key Findings:

· During Q3, paid search spend targeted to desktops comprised 93 percent of total spend while smartphones earned five percent and tablets 2 percent of spend. Ads served to tablet devices provided a 37 percent higher CTR than ads on desktops. The average CPC for ads served to tablets was 29 percent lower than desktops.

· Compared to last year, search advertisers on Google saw a 19 percent increase in clicks and a 24 percent drop in impressions during the quarter. During the same time, CTR on Google increased 57 percent while CPC decreased 18 percent, suggesting large-scale advertisers realised efficiency gains through improved matching and more effective bidding.

· Continual refinement of match types from Broad to Phrase to Exact was a significant contributor to improved efficiencies for advertisers. Over the last year, search marketers have increased their use of Exact Match, growing their click-share of the match type by 6 percent while increasing share of spend by 2 percent.

· On Yahoo and Bing, advertisers saw a 43 percent higher click volume at a 10 percent lower CPC over the year. Despite CTR declining on a year over year basis, CTR increased nine percent compared to Q2, implying improved ad matching or traffic characteristics by advertisers.

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US mobile social media audience grows 37 percent in 12 months

A study on mobile social media usage has indicated that 72.2 million Americans accessed social networking sites or blogs on their mobile device in August 2011, an increase of 37 percent in the past year.

comScore’s study also provided new insights into how mobile users interact with social media, finding that more than half read a post from an organisation, brand or event while on their mobile device.

Social media is one of the most popular and fastest growing mobile activities, reaching nearly one third of all U.S. mobile users, said Mark Donovan, comScore senior vice president for mobile.

Donovan said this behaviour is even more prevalent among smartphone owners with three in five accessing social media each month, highlighting the importance of apps and the enhanced functionality of smartphones to social media usage on mobile devices.

In August 2011, more than 72.2 million people accessed social networking sites or blogs on their mobile device, an increase of 37 percent from the previous year. Nearly 40 million U.S. mobile users, more than half of the mobile social media audience, access these sites almost every day, demonstrating the importance of this activity to people’s daily routines.

Research also indicated that although more people accessed these sites via their mobile browser, the social networking app audience grew five times faster in the past year. While the mobile browsing social networking audience grew 24 percent to 42.3 million users in the past year, the mobile social networking app audience surged 126 percent to 38.5 million.

A look at selected social networking brands, Facebook, Twitter and LinkedIn, revealed that each grew their mobile audiences by at least 50 percent in the past year. Facebook was home to the largest mobile audience among the three destinations with more than 57 million mobile users in August, up 50 percent from the previous year. Twitter saw its mobile audience jump 75 percent to 13.4 million people, while LinkedIn’s mobile audience climbed 69 percent to 5.5 million users.

Understanding how mobile users interact with social media is important for brands looking to engage with on-the-go consumers. comScore recently released new social media metrics through its MobiLens service, offering deeper insights into mobile consumers’ social media activities. Of those accessing social networking sites or blogs on their mobile device in August 2011, 80.3 percent read posts from people known personally, while 69.5 percent posted status updates while on their mobile device.

Mobile social networkers also were likely to interact with brands on these sites with more than half (52.9 percent) reading posts from organisations/brands/events. One in three mobile social networkers received a coupon/offer/deal, with one in four (27.7 percent) clicking on an ad while on a social networking site.

Donovan added, “Advertisers and marketers should take note – mobile users are not only engaging with their friends through social networking, but a majority are also interacting with brands in these social media environments. Knowing that fans and followers engage with branded content on mobile devices opens the door to a world of opportunity for location-based services.

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American Airlines – “by far the most hated” airline on social media: analysis

Social media analytics service Amplicate has indicated that 57 percent of all comments on US airlines on social media in the last 12 months were negative.

Social media users expressed intense hatred for a number of the leading lights of US aviation, including Delta, United and US Airways. But people reserved the most ire for American Airlines, the world’s fourth largest airline and by far the most hated on social media. A measly 12 percent of opinions on social media about the airline were positive over the last 12 months. Social media users’ complaints against American ranged from bad customer service to cancelled flights.

According to the company, although the most hated, American Airlines “didn’t put its foot in it as deeply as did Delta Airlines”. In June this year, Delta ignited a firestorm of negative comment on social media after it decided to charge returning US servicemen for extra baggage. Apparently, returning soldiers weren’t able to fit all their equipment from service in Afghanistan into the overhead locker, highlighted the company. Thanks to Delta’s unfortunate decision, there were more negative comments on US airlines in June than in any other month, with Delta accounting for over half of all negative opinions. But despite the faux pas, Delta still managed to avoid being hated as much as American, United, Spirit and US Airways.

Social media users had almost nothing negative to say about Virgin America. 97 percent of opinions on the airline were positive over the last 12 months. The on-board Wifi particularly pleased Virgin America’s fans: they tweeted their happiness from mid-air, while sipping on one of the airline’s alcoholic beverages. Virgin America was not the only airline to make its customers express their joy on social media. The vast majority of social media comments on JetBlue and SouthWest were positive.

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Business travel continues to flourish in Asia Pacific: CWT

Travel buyers in most parts of the world are facing tough negotiations as the landscape increases in complexity, highlighted Carlson Wagonlit Travel (CWT) as it released its 2012 Global Travel Forecast.

According to the company, at the same time, economic uncertainty continues in some parts of the world and has resurfaced in others, prompting increasing questions on exactly what 2012 holds in store for organisations and, by extension, for business travel.

Latin America growing rapidly, creating substantial price increases

Latin America (LATAM) will experience some of the most substantial price increases of any region across the main areas of travel spend, although a closer look reveals disparate conditions by country, with some local economies prospering and others suffering from political uncertainty and economic instability.

• CWT forecasts airline pricing to increase by about 5.8 percent in 2012, with increases in Colombia topping the charts at 7.9-11.4 percent. This is primarily due to rapidly increasing demand and limited supply in the region.
• Average daily hotel rates during the first half of 2012 are expected to increase by 9-11.8 percent, and increase by 10.1-12.2 percent during the second half of the year. Brazil could see increases of more than 24 percent in the first half of 2012 and up to a 34 percent increase during the second half of 2012.

Asia Pacific continues to flourish; prices to increase

The Asia Pacific (APAC) market is thriving, leading the way in many economic indicators and correspondingly, in business travel volumes. However, APAC travel prices will be flatter in 2012 on a quarter-over-quarter basis, given that the region was not as affected by the economic downturn as other parts of the world, and has already been experiencing strong growth rates throughout 2011.

• CWT forecasts airline pricing in APAC to increase by 3.1-3.8 percent in 2012 as a dynamic mix of legacy airlines and a growing group of low-cost carriers compete for travelers, holding down fares in the region.
• Average daily hotel rates in APAC will range from a 1.9 percent decrease to a 2.1 percent increase in the first half of 2012, and a 0.9 decrease to remaining flat for the second half of the year. APAC’s business hubs currently boast the highest occupancy rates in the world, which will present travelers with continued challenges in securing available rooms. Even so, strong supply growth across APAC will keep overall ADR growth in the region more modest than one might expect.
• Car rental rates in APAC will remain relatively flat, ranging from a decrease of 1.7 to an increase of 3.9 percent in 2012 in Australia and New Zealand, two of the primary rental car markets in the region.

North American conditions uncertain, price increases still expected

In 2012, the United States will continue to struggle with high unemployment rates and ongoing effects of the housing crisis that originated during the economic downturn, while Canada’s economy has been and is expected to remain relatively stable.

• CWT forecasts airline pricing in NORAM to increase by 3.5-4.1 percent in 2012, due to suppliers’ disciplined efforts to manage capacity even in the face of demand, ultimately resulting in fuller planes and rising prices overall.
• Average daily hotel rates in the U.S. will modestly increase in 2012, with very limited growth in Canada. As always, rates will vary widely across both countries based on geography and property type. Overall, CWT forecasts a 2.4-3.1 percent increase in the first half of 2012 for the NORAM region, and a 2.6-3.4 percent increase during the second half of the year.
• Car rental in NORAM is highly consolidated with intense competition for the business traveler, which forces suppliers to reduce or keep prices flat to retain corporate clients. Given this, CWT forecasts pricing to range from a 1 percent decrease to a 2.5 percent increase for 2012.
• M&E will continue its steady recovery throughout 2012, with a 1-4 percent increase in average group size for all meeting types, and a 5.5-6.5 percent increase in cost per attendee per day, due to strong demand and limited supply in related travel categories.

Europe, Middle East and Africa expect flatter overall pricing

A tenuous economy throughout Europe, the Middle East, and Africa (EMEA) is resulting in much flatter overall pricing expectations across the main areas of travel spend for 2012 in this region versus any other.

• CWT forecasts airline pricing in EMEA to increase by 2.1-3.7 percent in 2012, attributing the modest increase to ongoing economic challenges.
• Average daily hotel rates in EMEA will increase slightly in 2012, with a 0.2-0.9 percent increase in the first half of the year and a 0.1-0.8 percent increase during the second half. Rates will vary by market depending on local demand and occupancy rates.
• Car rental and high-speed rail are both viable ground transportation options in EMEA. CWT anticipates rail pricing to increase 3.6-4.2 percent in 2012, and car rental pricing to fluctuate by carrier due to a high level of competition, with the average ranging from a decrease of 1.9 percent to an increase of 2.9 percent.
• For M&E, CWT estimates the cost per attendee per day will decrease by 5-6 percent as more meetings are held domestically rather than internationally, reducing overall costs for attendees. Average group sizes will remain flat or down by as much as 3 percent for the region.

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Study shows link between online brand metrics and offline sales

Advertisers looking to build their brands online will need to look beyond traditional web metrics to determine if their investments are paying off, according to a recent study by Nielsen.

The company referring to its new report, Beyond Clicks and Impressions: Examining the Relationship Between Online Advertising and Brand Building, says there is emerging evidence that brand metrics – which show attitudinal response to online campaigns – can predict offline sales. The research further shows that there’s virtually no relationship between click-through rates and brand opinion or offline sales.

In the study, Nielsen examined how exposure to Internet ad campaigns influenced brand measures such as ad recall and likeability, and whether the consumer said they were more likely to purchase the product after viewing the ad. The analysis showed that online ads do, on average, succeed in influencing brand engagement and opinion, particularly for ad recall and message association. However, the degree of positive brand impact largely depends on the strength of the ad itself.

Nielsen research shows that online ads often increase overall awareness for the advertised brand. This is an especially important factor in driving new product success – clearly, consumers must become aware of a new product before they can buy it. The “lower funnel metrics” – Brand Favourability and Purchase Intent —are far more difficult to influence than Awareness, Recall and Association, given that these metrics require a change in consumer opinion or behaviour.

The company found that there is a lot of variance in the performance of online ad campaigns measured. Some campaigns are very successful across all metrics, some campaigns succeed only on certain dimensions, and others underperform across the board.

More generally, stronger performing web ads drive noticeably greater positive impact on all five branding metrics compared to average or weak ads. Just as TV ads perform better based on the quality of the creative and programming context, online ads are similarly impacted by factors such as creative, publisher content and type of ad unit. In fact, online advertising potentially offers a greater range of possibilities than TV in terms of format (display vs. video), dimension/size, or publisher. In many cases, understanding online ad impact and what makes a strong vs. weak ad is even more complex than understanding TV ad impact.

The study then connected brand engagement results with actual offline sales measured by Nielsen. While based on a small number of cases to-date, the research showed that campaigns in which consumers reported an increase in purchase intent after viewing an online ad also showed a boost in offline product sales. Cases with flat purchase intent showed no significant change in sales.

Additionally, the research showed that the click-through rate for a given ad campaign showed no connection to sales lift and no measure of whether the message resonated with consumers.

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