International Monetary Fund

Travel Management Priorities for 2012

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• published: 19 Jan 2012
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Travel Management Priorities for 2012 2012: a shifting landscape requiring strong foundations Travel managers who have faced market turbulence over the last few years should be steeling themselves for another challenging year that will underline the importance of an effectively managed travel program. Global economic recovery may be slower than previously anticipated, according to the International Monetary Fund, which has revised its forecast for GDP growth down to 4% (stable compared to 2011).1 These global figures hide considerable differences between countries, however, with weak progress in advanced economies contrasting with double-digit growth in China and India. Although oil prices may be lower than in previous years and air capacity looks set to rise slightly, higher travel costs can be expected across regions. In air travel, international traffic looks set to grow in all regions, especially to and from Asia Pacific. Nevertheless, airlines will maintain a tight capacity environment, and cuts will continue on domestic routes in the United States. In all markets, buyers will need to manage ancillary fees and high fuel surcharges, while new credit booking charges and the inclusion of airlines in the European Union's Emissions Trading Scheme will add to the cost of flights to and from E.U. airports. Hotel occupancy will continue to pose a challenge in many cities, making last-room availability agreements advisable to secure rooms for travelers. London in particular will require special attention during the 2012 Summer Olympic Games. Increases are likely to continue in average daily rates, ranging from negligible to double figures, depending on the city. Ground transportation should bring some new good news for the travel program, with car rental prices possibly falling in some markets as consolidation and competition intensify. At the same time, high-speed rail networks will continue developing around the world, notably in China and some European countries. Buyers will have to watch for higher prices though and progress in intermodal travel remains slow. In the meetings and events market, buyers can expect more scope for regional contracts in Europe but less flexibility on cancellation and contrition fees in North America. Average group size and spend will likely increase in North America but decrease in Europe, where many organizers will favor national over international destinations. Hybrid events combining physically present and remote attendees will be more common, and companies will increasingly adopt a more strategic, innovative and technology-driven approach to M&E; management while seeking synergies with the transient travel program. Finally, 2012 promises to bring improvements to the traveler experience as more dedicated travel management apps come onto the market and social media are used more commonly to share information relevant to business travel.