Indian biz destinations see dramatic decrease in air ticket prices across APAC, says 2009 Egencia Global Study

Hotel prices fall most in Delhi and Mumbai across APAC; Bangalore lodging prices least impacted among APAC destinations

Gurgaon, June 1, 2009: Egencia™, the world’s fifth largest travel management company, and part of Expedia, Inc., the world’s largest travel market place, unveiled its 2009 Global Benchmarking Study, evaluating the current economic climate and its impact on travel management trends and the supply environment for corporate travel. The study focuses on top domestic and international corporate travel markets in Asia-Pacific, North America and Europe. Building further on Egencia’s 2009 Forecast and Negotiability Index released last November, this study analyzes industry trends, supplier research and capacity implications for the rest of the year 2009.

APAC has witnessed a substantial decrease in average ticket prices (ATP) for all major corporate travel destinations. Capacity cuts, consolidation/alliance coordination and the strength of the dollar have contributed upward pressure on air pricing, but declining demand, economic uncertainty and a sustained decline in oil prices have driven downward pressure. Decreased demand and cut-backs on meetings have contributed downward pressure on pricing of hotel lodging as well.

Says Mr. Gaurav Sundaram, Country Director, Egencia India, “Indian enterprises increasingly understand the business reality that corporate travel represents the 2nd largest controllable cost. According to our study, comparing Q1 2008 with Q1 2009, the average ticket prices (ATP) for top corporate travel destinations like Delhi and Mumbai have decreased by as much as 50%. Bangalore ATP too has witnessed a downslide of 35%. This indicates that Indian enterprises can lean into the challenging market conditions, achieve greater control over their travel programs and make significant savings on their direct and indirect travel expenses.”

The study also indicates that the rapid growth in air capacity registered in APAC between 2002 and 2008 has now subsided, adds Sundaram.

Elaborating on the YOY fall in average daily rates (ADR) for hotels in the same time period, he says, “While all APAC destinations have registered decline in ADR, Delhi has been most severely hit with a 44% decline followed by Mumbai at 38%.The ADR decline in Bangalore at 15% is less than corresponding ADR decreases in Singapore (35%), Sydney (33%), Melbourne (24%), Shanghai and Tokyo (17% each).” Sundaram highlights several factors that have contributed to the decrease in corporate travel ATP’s and ADR’s in India during the survey period –

· A very significant impact on ATP & ADR was due sharp rise in the value of US$ vis-à-vis Indian Rupee.

· Economic slowdown and the resultant travel squeeze compounded by a significant trend towards downgrading in class of travel & stay have also influenced these matrices.

· Incoming corporate travel especially delegations, in Q1 2009, have been impacted by the imminent general elections and resultant political uncertainty.

· The Mumbai terror attacks in November 2008 impacted occupancy as well as inbound traffic during the peak season of Dec08-Feb09, which was further affected by travel advisories issued by some governments.

· Indian hotels and airlines have broadened their basket of services by focusing more on the budget/ economy segment, thereby diluting overall earnings and driving down ATP’s/ADR’s across corporate travel destinations.

Commenting on the global scenario in corporate travel, Rob Greyber, President, Egencia, said, “The impact of an uncertain economy is evident in the corporate travel industry. As companies tighten control over travel spend, the resulting decrease in demand has resulted in significant YOY declines in average daily rates (ADR) and average ticket prices (ATP) for most corporate travel markets in the first quarter of 2009.”

SMART TRAVEL MANAGEMENT INITIATIVES – FINDINGS

As part of its Global Benchmarking study, Egencia also surveyed over 100 travel buyers to analyze if and what actions companies were taking to control travel spend and how their expectations had changed in the last several months. As against 48% respondents in October 2008, as many as 64% of travel managers claimed to have reduced their corporate travel slightly or significantly. Surprisingly, as many as 13% respondents had actually increased corporate travel slightly, up from just 3% six months ago.

The top practices travel managers are using to save on travel costs include:

· Advanced booking of airline tickets (58%, up from 55% in Fall 2008)

· Active tracking of unused tickets (57%, up from 44%)

· Enforcing travel policy more rigorously (53%, up from 43%)

Says Pam Keenan Fritz, Senior Vice President, Egencia North America, “We’ve seen corporate travel buyers trending toward more active spend management. Our clients are controlling spend through the greater use of advanced booking, unused ticket tracking and more rigorous policy enforcement. Other travel procurement initiatives include re-negotiating supply contracts (19%) and enforcing the use of a single corporate travel provider (19%) to optimize travel spends management.”

Research Methodology

Benchmarking, forecast and projections are based on the statistical analysis of the past and present industry trends, macroeconomic factors, market research and vendors’ capacity forecasts for 2009. Smith Travel Research (STR) and OAG filings were leveraged for a market-level analysis of both Lodging and Air capacity. ARC, BSP, STR and Expedia Internal Data were used for market-level analysis of pricing.

As indicated above, the projections are based on information gathered from various internal and external sources. The forecast represents an opinion based on current market factors and is not a representation or warranty as to the accuracy of the forecasts or projections made herein. Actual changes in ticket prices and hotel rates could vary significantly from forecasted numbers, impacted by unforeseen future economic and political factors.

About Egencia, an Expedia, Inc. Company

Egencia is the fifth largest travel management company in the world. As part of Expedia, Inc., (NASDAQ: EXPE), the world’s largest travel marketplace, Egencia helps businesses get ahead by offering the only truly integrated corporate travel service. Egencia’s industry expertise helps drive results that matter, delivering meaningful advancements that have a real impact. By combining a powerful offline and online service, Egencia delivers a complete corporate travel offering supported by global market expertise and a best-in-class technology platform.

For more information, go to www.egencia.com

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance. These forward-looking statements are based on management’s expectations as of the date of this press release and assumptions which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Actual results and the outcome of events may differ materially from those expressed or implied in the forward-looking statements for a variety of reasons, including declines or disruptions in the travel industry caused by, among others, prolonged adverse economic conditions, health risks, increased adverse weather, war and/or terrorism and bankruptcies.

Egencia and the Egencia logo are either registered trademarks or trademarks of Expedia, Inc. in the U.S. and/or other countries. Other logos or product and company names mentioned herein may be the property of their respective owners.

© 2009 Egencia, LLC. All rights reserved.

###

For more information, or to get a full copy of Egencia’s 2009 Global Benchmarking Study, please contact:

Puneet Khunger (+91.9717022726)

R&PM:Edelman, Gurgaon

puneet.khunger {at} edelman(.)com