State of the IndustrySan Diego Business Travel Association
Michele CardellaFebruary 23, 2012 video
2Copyright Advito 2012
State-of-the-Industry Overview
Airline
Setting
Hotel
Ground Transportation
Meetings
3Copyright Advito 2012
Risk Factors
Economy
Oil price
Security/safety
4Copyright Advito 2012
Global Economic Outlook
The recovery is expected to slow down in 2012 in most regions, including China, and will decline in the eurozone
2010: +5.2% ◄2011: +3.8% ◄2012: +3.3% ◄
2010: +1.9%◄2011: +1.6% 2012: - 0.5%◄
Euro Area
2010: +3.0%◄2011: +1.8%◄2012: +1.8%◄
USA
World
2010: +10.4%◄2011: +9.2% ◄2012: +8.2% ◄
China
GDP◄ indicates revision to previous forecast
Source: IMF, World Economic Outlook, Jan. 2012
5Copyright Advito 2012
Eurozone Crisis
So far there is no solution to Greek debt, and future bailouts remain open questions
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Eurozone breakup averted - at least for the moment
Belgium has entered another
recession
France’s credit rating has been
downgraded, joining Austria, Malta, Slovenia, Slovakia, Cyprus, Italy, Portugal and Spain
6Copyright Advito 2012
2012 Outlook
A range of capacity
conditions means hotel rate hikes will vary
across the globe, from 1-20%
Demand is relatively robust and will continue to grow in 2012, barring negative economic developments
Strong demand in Latin America and Asia is pushing airfare increases higher in these regions (up to 9% YOY) than in others (average 3% YOY)
After two years of little change, rental
car rates may rise 4-6%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Meeting rates will rise faster in 2012 and accelerate in 2013
7Copyright Advito 2012
High demand for regional economy-
class travel in Asia has bumped the
forecast increase up to 9%
Air Outlook 2012
Major airlines are cutting capacity after an estimated 2% YOY decline in 4Q2011
The projected YOY increase for Latin America has risen to 7% for
intercontinental and 8% for regional travel
Airfare forecast for Europe is reduced
from a YOY increase of 5% down to 3%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
8Copyright Advito 2012
Airfare Predictions for 2012North America
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in USD)
Business Economy
Intercontinental +5% +5%
Regional +3% +5%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Rising demand and supplier capacity discipline will result in YOY increases in airfares
◄ indicates revision to previous forecast
9Copyright Advito 2012
Airfare Predictions for 2012Latin America
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in $ USD)
Business Economy
Intercontinental +7%◄ +7%◄
Regional +8%◄ +8%◄
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Following similar trends and capacity/demand balance, Latin American air costs will also increase
◄ indicates revision to previous forecast
10Copyright Advito 2012
Airfare Predictions for 2012Europe
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in € EUR)
Business Economy
Intercontinental +3%◄ +3%◄
Regional +1%◄ +3%◄
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Ongoing concern for Europe’s economy has led Advito to revise downward its forecast for YOY fare increases
◄ indicates revision to previous forecast
11Copyright Advito 2012
Airfare Predictions for 2012Middle East
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in € EUR)
Business Economy
Intercontinental +5% +4%
Regional +3% +5%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Large capacity increases by Middle East carriers will temper ability to raise fares even with higher demand
◄ indicates revision to previous forecast
12Copyright Advito 2012
Airfare Predictions for 2012Asia-Pacific
Forecast of average development of air fares used by corporate clients 2012 against 2011 (in $ USD)
Business Economy
Intercontinental +4% +4%
Regional +4% +9%◄
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Demand is increasing rapidly with the strength of the region’s economic rebound
◄ indicates revision to previous forecast
13Copyright Advito 2012
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
May
/09
Jun
/09
Jul/
09A
ug
/09
Sep
/09
Oct
/09
No
v/09
Dec
/09
Jan
/10
Feb
/10
Mar
/10
Ap
r/10
May
/10
Jun
/10
Jul/
10A
ug
/10
Sep
/10
Oct
/10
No
v/10
Dec
/10
Jan
/11
Feb
/11
Mar
/11
Ap
r/11
May
/11
Jun
/11
Jul/
11A
ug
/11
Sep
/11
Oct
/11
No
v/11
Advance Booking Behavior
Same Day
> 0 and <=3 Days
> 3 and <= 7 Days
> 7 and <= 14 Days
> 14 and <=21 Days
> 21 Days
Advance Booking
Bookings made more than 14 days in advance remain at about 50% share of a fluctuating behavior pattern
North America
Source: Advito 2012 Industry Forecast Update, Feb. 2012
14Copyright Advito 2012
Recommendations for Buyers – Air
Be wary of significant over-commitment to volume or market-share targets during negotiations
Negotiate hard on the pockets of over-capacity in the market
Joint ventures and other airline consolidations will pose an increasing threat to managed air programs
A reliable way to reduce average ticket price is to find ways to avoid last-minute purchases
Source: Advito 2012 Industry Forecast, Sept. 2011
15Copyright Advito 2012
Spotlight: Oil Prices
Fears of economic slowdown have moderated
skyrocketing oil prices
Every US$10 rise in barrel price pushes up total
ticket price by approximately 3% (higher fares and
fuel surcharges)
IMF forecasts US$99.09/barrel in 2012
Source: Advito 2012 Industry Forecast Update, Feb. 2012
16Copyright Advito 2012
Spotlight: Ancillary FeesThe Issues
Total price
VisibilityLeverage
17Copyright Advito 2012
Spotlight: Ancillary FeesThe Trends
Airlines collected $21.46bn in ancillary fee revenue in 2010 – an increase of 59% YOY and 775% over 2007
Expect airlines to continue experimenting with different forms of unbundling and merchandising
Our recommendations to clients Continue to create policy on unbundled services, including specifying which can be reimbursed and which cannot
Press suppliers to provide adequate reporting
Try to negotiate on rebundled packages as part of corporate agreements
Source: Advito 2012 Industry Forecast, Sept. 2011
18Copyright Advito 2012
Spotlight – Europe Card Payment Fees
Source: Advito 2012 Industry Forecast, Sept. 2011
In 2011, BA and Lufthansa Group announced fees for credit card payments
What should clients be doing?– Prepare for other airlines to
follow suit/expand similar fee systems
– Make the fees a topic for negotiation in upcoming deals
– Evaluate payment options
19Copyright Advito 2012
Spotlight – EU Emissions Trading System
EU will include all airlines in ETS as of Jan. 1, 2012
ETS sets a cap on permissible emissions; beyond that cap, companies must buy permits
Non-European airlines are fighting hard against being included in the ETS
Source: Advito 2012 Industry Forecast, Sept. 2011
How much the ETS will cost airlines?
How much of that cost they will pass on to passengers?
How they will pass it on?
20Copyright Advito 2012
India’s forecasted ADR increases are
slowing to 2-4% due to growing capacity
Brazil will see double-digit YOY
ADR growth at 18-20%
In Israel and Saudi Arabia demand is outstripping capacity,
leading to 10-15% rise in ADR
Strong demand in Asia, Latin
America and the Middle
East is driving a 3% YOY jump in ADR
Hotel Outlook 2012
Source: Advito 2012 Industry Forecast Update, Feb. 2012
21Copyright Advito 2012
Hotel ADR: 2012 Forecast by Region
Forecast of average development of hotel rates used by corporate clients in 2012 against 2011 (local currency)
North America +5-6%
Europe+2-3%
Asia-Pacific+8-10%◄
Middle East +7-15%◄
Africa+3-4%
Steadily increasing demand will usher in moderate ADR increases
Latin America +8-18% ◄
Source: Advito 2012 Industry Forecast Update, Feb. 2012
◄ indicates revision to previous forecast
22Copyright Advito 2012
Hotel ADR: 2012 Forecast by Market
Forecast of average development of hotel rates used by corporate clients in 2012 against 2011 (local currency)
US +5-6%
RU +3-5%
CN +4-6% KO +3-5%
SG +8-10%◄
AE +2-4% IN +2-4%◄MX +1-3%
BR +18-20%◄
CH-PT-SE +0-2%ES-IE-IT +1-3% NL-TR-UK +1-3% AT-BE-CZ +2-4%FR-DE +2-4%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
AR +8-10%◄
AU +7-9%◄
CA +4-6%
JP +0-2%
DK-FI-NO +2-4%
ZA +2-4%
SA +13-15%◄
Moderate increases are expected due to continuing though moderated economic growth tempered by new supply
◄ indicates revision to previous forecast
23Copyright Advito 2012
Spotlight – London Olympics (July 27- Aug.12, 2012)
February 2012 Update
20 percent of rooms to be released back into the market
120,000+ room nights
200 hotels (5-star to budget)
Hotels may ask 5-10x their normal rate
Demand will skyrocket
24Copyright Advito 2012
Recommendations for Buyers – Hotel
Insist on negotiated rate being an LRA rate
Source: Advito 2012 Industry Forecast, Sept. 2011
Expand number of hotels in RFP process but concentrate on fewer properties in final decision
Negotiate hotel contracts for transient travelers to cover small meetings (up to 50 room nights)
Be wary of dynamic pricing, and be sure to negotiate more than 10 percent off the BAR
Consider imposing city caps based on total cost of stay
25Copyright Advito 2012
2012 Outlook – Meetings
Demand will continue to grow worldwide, approaching peak 2008 levels by year-end 2012
Rates are expected to return to 2008 levels in 2013/2014
Rates for meetings will rise faster in 2012
than in 2011 and accelerate even more sharply in 2013
Lead-times may start to lengthen as supply at preferred hotels dwindles
Source: Advito 2012 Industry Forecast, Sept. 2011
26Copyright Advito 2012
Recommendations for Buyers – Meetings
Watch out for suppliers being less flexible in negotiating terms and conditions
With the negotiating environment likely to be even tougher in 12 months’ time, consider the option of multi-year deals with suppliers
Book ahead, especially in high-demand cities
Do not rely on finding upscale hotel bargains
Source: Advito 2012 Industry Forecast, Sept. 2011
Be more prepared to consider second- and third-tier cities.
27Copyright Advito 2012
2012 Outlook – Car Rental
Rate increases will be minor (4-6%) thanks to strong competition, but total cost of rental will continue to climb (ancillary charges, taxes, insurance, fuel)
Demand will continue to rise steadily, and providers will keep inventory tightly aligned
Source: Advito 2012 Industry Forecast, Sept. 2011
28Copyright Advito 2012
Spotlight – Car Sharing
Corporate interest is likely to grow in 2012
Good for less-than-a-day rentals
Administrative processing provides good management information
Environmentally friendly aspect–better vehicle utilization and introduction of electric cars
Source: Advito 20112 Industry Forecast, Sept. 2011
Companies which need car rentals in major cities should
evaluate the market
Analyze your existing rental program in more detail
29Copyright Advito 2012
Recommendations for Buyers – Car Rental
Negotiate harder on ancillaries and other charges, such as refueling premiums
Source: Advito 2012 Industry Forecast, Sept. 2011
Revisit car rental program before suppliers start to push up their rates
Book further in advance
Evaluate relative financial costs of private vehicle use vs. car rental
Set a policy on ancillary items (e.g., satellite navigation systems)
30Copyright Advito 2012
2012 Outlook – Rail
Source: Advito 2012 Industry Forecast, Sept. 2011
Expect price increases of 4-5%, on a par with 2011
Demand and price are provisionally forecast to be flat in 2012, although that could change with the
introduction of several planned new domestic LCCs
Distribution of international rail will remain
challenging
French national operator SNCF could lose market
share as they begin major network renovations
Europe
Japan
31Copyright Advito 2012
Advito Links
Industry Forecast: updated quarterly
Changing the DNA of Managed Travelo Using Social and Mobile to Enhance Productivity, Morale and the
Bottom Line
Strategic Travel Program KPI's White Papero Improving travel program management through strategic KPIs
and meaningful savings measurement
Coming soon…
Beyond End-to-EndHow Consumerization is Redrawing the Blueprint for Corporate Travel Management
32Copyright Advito 2012
Thank You!
33Copyright Advito 2012
Cost per Mile: Asia Pacific
Source: Advito 2012 Industry Forecast Update, February 2012
-20%
-10%
0%
10%
20%
30%
40%
50%
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
Asia Pacific - USD Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11Intercontinental Business CPM 40.0 41.2 39.5 40.3 38.3 44.5 43.3 41.7 42.6 42.2 44.4 43.2Intercontinental Economy CPM 16.4 14.9 15.0 14.2 15.0 15.3 17.4 18.7 19.2 16.5 16.0 19.4
Regional Business CPM 48.7 41.9 46.2 46.6 48.6 49.9 52.9 58.2 53.2 53.3 51.9 54.8Regional Economy CPM 30.1 28.0 29.1 30.8 35.8 32.2 32.9 33.0 33.6 31.3 32.9 31.5
34Copyright Advito 2012
Cost per Mile: Europe
-30%
-20%
-10%
0%
10%
20%
30%
40%
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
EUROPE - EUR Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Intercontinental Business CPM 33.6 31.3 33.8 34.7 34.3 34.4 35.5 32.6 32.4 33.8 33.5 34.4
Intercontinental Economy CPM 11.9 9.9 11.4 10.9 11.8 11.2 15.0 11.9 12.1 12.5 11.7 12.6
Regional Business CPM 43.6 38.1 39.4 38.2 40.6 42.4 43.4 41.9 42.7 45.7 48.9 53.3
Regional Economy CPM 27.5 26.0 25.7 27.5 28.0 26.7 29.1 28.0 26.2 27.7 26.9 28.1
Source: Advito 2012 Industry Forecast Update, Feb. 2012
35Copyright Advito 2012
Cost per Mile: Middle East
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
Middle East - EUR Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Intercontinental Business CPM 25.7 32.7 31.7 30.8 27.4 29.3 32.5 27.3 27.8 37.3 31.2 33.2
Intercontinental Economy CPM 10.0 11.0 10.5 12.0 8.3 9.1 11.0 10.4 13.3 14.2 12.3 13.2
Regional Business CPM 53.4 44.8 64.9 48.0 52.9 47.0 48.6 47.7 59.1 39.9 51.6 58.8
Regional Economy CPM 21.2 17.9 17.2 16.6 19.8 21.0 21.5 22.7 21.0 22.9 18.1 19.0
Source: Advito 2012 Industry Forecast Update, Feb. 2012
36Copyright Advito 2012
Cost per Mile: Latin America
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
Latin America - USD Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11Intercontinental Business CPM 35.0 33.5 34.6 35.3 42.6 38.9 36.8 40.6 44.5 40.6 36.2 40.5Intercontinental Economy CPM 18.0 15.4 13.9 16.5 16.5 16.8 15.5 16.6 17.1 19.7 16.2 18.5
Regional Business CPM 38.6 34.6 33.7 36.4 39.4 41.9 34.6 31.5 36.4 34.5 44.4 41.4Regional Economy CPM 36.9 30.5 26.9 30.7 30.4 28.8 31.0 31.1 37.9 34.8 32.8 35.8
Source: Advito 2012 Industry Forecast Update, Feb. 2012
37Copyright Advito 2012
Cost per Mile: North America
-10%
0%
10%
20%
30%
40%
50%
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11
Cost per Mile (y-o-y)
Inter-continental Business Inter-continental Economy Regional Business Regional Economy
North America - USD Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11Intercontinental Business CPM 53.6 55.2 55.9 56.8 57.9 57.9 56.2 54.4 55.1 58.8 58.6 58.2Intercontinental Economy CPM 18.3 18.0 17.2 18.4 18.7 19.9 21.2 20.9 19.6 20.0 18.5 18.0
Regional Business CPM 55.8 56.5 60.6 60.6 66.7 65.9 60.1 61.3 59.9 65.7 68.6 64.9Regional Economy CPM 32.0 32.6 35.5 35.7 36.4 37.2 36.5 37.0 35.5 35.0 35.5 36.0
Source: Advito 2012 Industry Forecast Update, Feb. 2012
38Copyright Advito 2012
Economy Class Ratio
North America Europe
The use of economy class has increased on regional flights in North America and Europe
51% 54% 51%
87% 87% 89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011YTD
Eco
no
my
seg
me
nts
as
shar
e o
f to
tal
Economy Class Ratio
Inter-continental Regional
48% 50%55%
92% 93% 94%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011YTD
Eco
no
my
seg
me
nts
as
shar
e o
f to
tal
Economy Class Ratio
Inter-continental Regional
Source: Advito 2012 Industry Forecast Update, Feb. 2012
39Copyright Advito 2012
Hotel Rate Developments: United Kingdom
6%
2%
-2%
0%
9%
3%
7%
3% 3%
11%
4%
3%
0
20
40
60
80
100
120
140
160
180
-4%
-2%
0%
2%
4%
6%
8%
10%
12%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
United Kingdom DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (GBP) £149 £140 £137 £141 £147 £152 £165 £159 £136 £170 £154 £150
Source: Advito 2012 Industry Forecast Update, Feb. 2012
40Copyright Advito 2012
Hotel Rate Developments: United Arab Emirates
0%
-13%
-1% -1%
1%
-5%
-11%
2%
-2%
4%
-5%
8%
0
200
400
600
800
1,000
1,200
-15%
-10%
-5%
0%
5%
10%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
UAE DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (AED) AED 927 AED 921 AED 977 AED 901 AED 809 AED 693 AED 593 AED 602 AED 593 AED 755 AED 870 AED 1,023
Source: Advito 2012 Industry Forecast Update, Feb. 2012
41Copyright Advito 2012
Hotel Rate Developments: Singapore
11%
8%
4%
8%
1%
5%
-2%
7%
2%
12%
7% 7%
0
50
100
150
200
250
300
350
400
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Singapore DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (SGD) SGD 296 SGD 312 SGD 304 SGD 307 SGD 305 SGD 310 SGD 309 SGD 304 SGD 303 SGD 360 SGD 316 SGD 320
Source: Advito 2012 Industry Forecast Update, Feb. 2012
42Copyright Advito 2012
Hotel Rate Developments: Russia
-4%
-2%-2%
-3%
4%
-2%
-8%
-3%
7%
2% 2%
-8%
0
2,000
4,000
6,000
8,000
10,000
12,000
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Russia DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (RUR) 8,878р. 8,271р. 8,814р. 8,345р. 8,737р. 8,744р. 8,950р. 8,109р. 8,128р. 9,694р. 9,117р. 8,283р.
Source: Advito 2012 Industry Forecast Update, Feb. 2012
43Copyright Advito 2012
Hotel Rate Developments: United States
Source: Advito 2012 Industry Forecast Update, Feb. 2012
1%
3%
3%
4%
3%
3%4%
3%
3%
3%3%
3%
0
20
40
60
80
100
120
140
160
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
United States DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (USD) $132 $129 $131 $135 $134 $137 $139 $134 $132 $140 $140 $138
44Copyright Advito 2012
Hotel Rate Developments: Korea
Republic of Korea OCT 10 NOV 10 DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11Local ADR (KRW) KRW 256,904 KRW 255,287 KRW 220,635 KRW 223,201 KRW 230,986 KRW 237,131 KRW 231,705 KRW 240,298 KRW 229,216 KRW 220,106 KRW 234,094 KRW 262,607
4%3%
-1%
5% 5%
8%
-6%
-4%
2%
14%
8%
0%
0
50,000
100,000
150,000
200,000
250,000
300,000
-10%
-5%
0%
5%
10%
15%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Source: Advito 2012 Industry Forecast Update, Feb. 2012
45Copyright Advito 2012
Hotel Rate Developments: Japan
-11%-10%
-6%
-17%
-3%-3%
-6%
2%
6%
1%
7% 7%
0
5,000
10,000
15,000
20,000
25,000
-20%
-15%
-10%
-5%
0%
5%
10%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Japan DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (JPY) JPY 19,354 JPY 18,608 JPY 20,025 JPY 17,070 JPY 20,461 JPY 19,620 JPY 19,016 JPY 19,855 JPY 19,390 JPY 19,736 JPY 20,517 JPY 20,729
Source: Advito 2012 Industry Forecast Update, Feb. 2012
46Copyright Advito 2012
Hotel Rate Developments: Italy
2%
5%
0%1%
0%
5%
-2%-3%
4%
0%
-4%
5%
0
20
40
60
80
100
120
140
160
180
200
-6%
-4%
-2%
0%
2%
4%
6%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Italy DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (EUR) € 132 € 144 € 141 € 143 € 156 € 157 € 163 € 152 € 148 € 178 € 160 € 142
Source: Advito 2012 Industry Forecast Update, Feb. 2012
47Copyright Advito 2012
Hotel Rate Developments: Ireland
-6%
-3%
-1%
1%
4%
-3%
-5%
1%
-5%
9%
2%
10%
0
20
40
60
80
100
120
140
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Ireland DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (EUR) EUR 105 EUR 105 EUR 110 EUR 110 EUR 109 EUR 113 EUR 117 EUR 120 EUR 111 EUR 123 EUR 113 EUR 116
Source: Advito 2012 Industry Forecast Update, Feb. 2012
48Copyright Advito 2012
Hotel Rate Developments: India
8%
2%
6%
3%
5%
-1%-1%
-1%
2%
0%
-2%
-3% 0
2,000
4,000
6,000
8,000
10,000
12,000
-4%
-2%
0%
2%
4%
6%
8%
10%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
India DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (INR) INR 9,479 INR 9,407 INR 9,607 INR 8,967 INR 8,308 INR 7,937 INR 7,772 INR 7,651 INR 7,839 INR 8,557 INR 8,486 INR 8,796
Source: Advito 2012 Industry Forecast Update, Feb. 2012
49Copyright Advito 2012
Hotel Rate Developments: Germany
-1%
3% 3%
6%
1%
11%
0%
-1%
3%
-2%
2%
1%
0
20
40
60
80
100
120
140
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Germany DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (EUR) € 112 € 119 € 118 € 119 € 116 € 123 € 116 € 109 € 107 € 133 € 128 € 117
Source: Advito 2012 Industry Forecast Update, Feb. 2012
50Copyright Advito 2012
Hotel Rate Developments: France
7%
4%
2%
1%
3%
5%
7%
2%
6%
2%
-2%
4%
0
50
100
150
200
250
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
France DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (EUR) € 164 € 159 € 156 € 161 € 161 € 180 € 202 € 173 € 167 € 192 € 177 € 165
Source: Advito 2012 Industry Forecast Update, Feb. 2012
51Copyright Advito 2012
Hotel Rate Developments: China
7%
8%
3%2%
4%
1%
2%
0%
5%
1%
-3%
2%
0
200
400
600
800
1,000
1,200
-4%
-2%
0%
2%
4%
6%
8%
10%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
China DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (CNY) CNY 1,038 CNY 1,056 CNY 981 CNY 1,018 CNY 1,104 CNY 1,045 CNY 1,042 CNY 1,013 CNY 1,002 CNY 1,080 CNY 1,127 CNY 1,051
Source: Advito 2012 Industry Forecast Update, Feb. 2012
52Copyright Advito 2012
Hotel Rate Developments: Canada
2%
-1% -1%
2%
-2% -2%
-4%
-5%
0%
2%
0%
3%
0
20
40
60
80
100
120
140
160
180
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
3%
4%
Dec
-10
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Canada DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (CAD) $146 $144 $146 $147 $146 $154 $159 $151 $157 $164 $158 $155
Source: Advito 2012 Industry Forecast Update, Feb. 2012
53Copyright Advito 2012
Hotel Rate Developments: Brazil
3% 3%
5%
8%
13%
5%
7%
13%
16%
25%
17%
21%
0
50
100
150
200
250
300
350
0%
5%
10%
15%
20%
25%
30%D
ec-1
0
Jan-
11
Feb
-11
Mar
-11
Ap
r-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep
-11
Oct
-11
No
v-11
Mo
nth
ly A
DR
(Lo
cal C
urr
ency
)
AD
R D
evel
op
men
t (Y
-o-Y
)
Country ADR Last 12 Months
Brazil DEC 10 JAN 11 FEB 11 MAR 11 APR 11 MAY 11 JUN 11 JUL 11 AUG 11 SEP 11 OCT 11 NOV 11Local ADR (BRL) BRL 210 BRL 230 BRL 242 BRL 246 BRL 251 BRL 248 BRL 246 BRL 249 BRL 258 BRL 286 BRL 261 BRL 279
Source: Advito 2012 Industry Forecast Update, Feb. 2012
54Copyright Advito 2012
Hotel Rate Developments: Top U.S. Cities
Highest 2011 ADR increases seen in San Francisco and NYC
Top 2010 2011 U.S. Cities 1Q 2Q 3Q 4Q 1Q 2Q 3QATL ADR 132 129 131 137 135 133 132
Y-o-Y -8.1% -5.8% -1.7% 4.9% 2.6% 3.0% 1.2%BOS ADR 176 228 235 218 183 240 246
Y-o-Y -6.9% 1.0% 6.6% 2.2% 3.9% 5.3% 4.8%CLT ADR 124 125 121 128 131 130 127
Y-o-Y -6.8% -5.7% -1.3% 1.9% 5.0% 3.8% 4.3%CHI ADR 147 193 195 200 153 206 202
Y-o-Y -11.8% -0.1% 5.3% 5.5% 4.1% 6.9% 3.9%DFW ADR 125 124 125 129 138 132 131
Y-o-Y -8.2% -4.2% -0.6% 3.8% 10.4% 6.5% 4.4%DEN ADR 139 140 140 139 141 146 151
Y-o-Y -4.3% -0.7% -0.3% -0.6% 1.4% 3.9% 7.3%HOU ADR 135 136 130 131 134 141 134
Y-o-Y -10.2% -7.5% -5.3% -3.9% -0.8% 3.9% 3.4%IND ADR 109 113 110 107 109 112 112
Y-o-Y -6.2% -0.2% -3.2% -4.4% -0.3% -0.8% 1.9%LAS ADR 134 128 120 129 141 133 130
Y-o-Y -3.6% 2.2% 6.2% 3.4% 5.0% 3.3% 8.5%LAX ADR 155 162 162 161 168 169 170
Y-o-Y -5.2% 0.4% 2.5% 2.1% 8.5% 4.3% 5.3%
Top 2010 2011 U.S. Cities 1Q 2Q 3Q 4Q 1Q 2Q 3QNYC ADR 245 303 304 350 260 329 323
Y-o-Y -5.3% 12.6% 7.2% 4.2% 6.0% 8.8% 6.4%ORL ADR 121 119 104 116 130 123 109
Y-o-Y -8.1% -4.7% -1.2% -0.7% 6.9% 3.3% 4.5%PHL ADR 157 164 160 163 164 177 170
Y-o-Y -7.7% -1.1% 2.9% -1.7% 4.6% 8.0% 6.3%PHX ADR 159 122 104 130 153 120 104
Y-o-Y -10.3% -0.4% -0.6% -3.5% -3.7% -1.9% 0.4%PDX ADR 118 121 127 123 117 134 133
Y-o-Y -12.0% -7.3% -4.0% -2.5% -0.4% 5.9% 5.0%STL ADR 113 118 118 118 119 125 124
Y-o-Y -4.3% -0.6% 1.1% 4.0% 2.6% 3.9% 5.0%SAN ADR 140 144 152 139 143 144 152
Y-o-Y -9.8% -4.6% 1.0% -1.2% 2.3% -0.1% 0.0%SFO ADR 187 186 203 205 207 213 235
Y-o-Y -8.5% -1.7% 3.9% 2.9% 11.1% 14.8% 15.6%SEA ADR 148 160 170 151 152 163 178
Y-o-Y -7.0% -4.9% 0.7% 0.7% 3.0% 2.2% 4.7%WAS ADR 229 260 230 239 234 259 223
Y-o-Y -3.4% 5.0% 7.0% 0.6% 2.1% -0.4% -3.3%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
55Copyright Advito 2012
Hotel Rate Developments: Top European Cities
London continues to be the best performing market in Europe
Top Euro Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q 3QAmsterdam ADR 141 160 158 150 146 159 158
Y-o-Y -4.7% 7.8% 8.1% 5.5% 3.4% -0.3% -0.3%
Barcelona ADR 116 130 129 120 121 147 161Y-o-Y -8.4% 2.3% 1.1% 4.1% 4.7% 13.1% 24.5%
Berlin ADR 121 120 127 116 122 118 117Y-o-Y -3.1% -0.8% 4.1% -1.9% 0.7% -1.8% -7.6%
Brussels ADR 141 155 139 157 156 163 145Y-o-Y -8.0% 3.7% 4.4% 5.9% 10.6% 4.7% 4.4%
Copenhagen ADR 1031 1111 1184 1120 1132 1208 1207Y-o-Y -4.3% -1.9% 9.1% -10.8% 9.8% 8.8% 1.9%
Dublin ADR 114 119 116 109 111 117 121Y-o-Y -13.8% -5.0% -6.2% -8.1% -3.1% -1.2% 3.7%
Duesseldorf ADR 114 116 116 129 122 137 109Y-o-Y -4.8% -0.1% 0.1% 0.9% 7.1% 18.6% -6.4%
Frankfurt ADR 145 146 140 139 152 141 142Y-o-Y -7.9% 2.2% 1.7% -1.2% 4.3% -3.4% 1.5%
London ADR 156 166 168 171 160 180 180Y-o-Y 2.1% 11.3% 9.5% 8.2% 2.5% 8.6% 7.3%
Hamburg ADR 114 117 123 115 114 123 125Y-o-Y -6.5% 0.0% 2.7% -3.8% -0.2% 5.0% 1.2%
Top Euro Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Madrid ADR 117 130 115 120 118 130 134Y-o-Y -11.0% 5.9% 4.1% -1.4% 0.4% 0.1% 16.6%
Milan ADR 170 171 170 162 171 176 169Y-o-Y -6.5% 0.0% 12.2% 4.9% 0.5% 2.8% -0.6%
Moscow ADR 9180 9391 9275 9831 9548 9556 9590Y-o-Y -14.0% -3.6% 1.0% 1.3% 4.0% 1.8% 3.4%
Munich ADR 124 139 152 142 136 140 151Y-o-Y -10.0% 4.1% 7.3% 4.5% 9.9% 1.0% -0.8%
Paris ADR 180 198 199 196 184 215 209Y-o-Y -4.8% 3.5% 9.8% 7.3% 2.4% 8.5% 5.0%
Prague ADR 2849 3130 3108 2958 2712 3172 3229Y-o-Y -11.1% -6.4% 0.8% 0.0% -4.8% 1.3% 3.9%
Rome ADR 147 191 184 167 157 190 182Y-o-Y -9.9% 4.1% -1.0% 6.5% 6.3% -0.6% -1.3%
Stockholm ADR 1629 1740 1767 1695 1616 1723 1671Y-o-Y -3.2% 3.5% 8.0% 1.0% -0.8% -1.0% -5.4%
Vienna ADR 131 141 145 137 131 143 143Y-o-Y 2.6% 7.6% 6.1% 2.3% -0.1% 1.0% -1.3%
Zurich ADR 279 288 280 259 260 277 274Y-o-Y -7.9% 1.9% 5.6% -5.9% -7.0% -4.0% -2.4%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
56Copyright Advito 2012
Hotel Rate Developments: Top Cities in Asia-Pacific
Hotel rates in APAC are recovering faster than other regions with Hong Kong and Singapore leading the way
Top APAC Cities 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Bangkok ADR 4784 4604 4393 4585 4881 4900 4785Y-o-Y -9.4% -0.1% -5.0% -6.8% 2.0% 6.4% 8.9%
Beijing ADR 1004 1060 1012 1079 1074 1142 1111Y-o-Y -9.4% -7.0% -2.3% 4.1% 7.0% 7.7% 9.7%
Dubai ADR 961 702 614 874 915 709 668Y-o-Y -10.6% -10.4% -3.3% -9.7% -4.8% 0.9% 8.8%
Hong Kong ADR 1911 1896 1911 2210 2350 2112 2116Y-o-Y 0.4% 13.2% 13.4% 20.2% 23.0% 11.4% 10.7%
Mumbai ADR 9582 9044 8921 10337 10252 9121 8629Y-o-Y -17.7% -6.6% -1.7% 12.0% 7.0% 0.9% -3.3%
Seoul ADR 230912 236423 240690 253612 242163 245719 248310Y-o-Y -0.6% 9.4% 10.1% 9.9% 4.9% 3.9% 3.2%
Shanghai ADR 1136 1281 1250 1289 1195 1228 1185Y-o-Y -7.7% 7.6% 9.2% 13.3% 5.2% -4.2% -5.2%
Singapore ADR 288 304 301 296 307 308 322Y-o-Y -1.5% 12.6% 9.8% 8.8% 6.6% 1.2% 7.1%
Sydney ADR 259 242 237 260 249 238 245Y-o-Y 2.8% 7.6% 2.3% 3.8% -3.8% -1.6% 3.3%
Tokyo ADR 22243 22100 20760 20958 21050 21643 21207Y-o-Y -8.3% -3.0% -7.5% -9.3% -5.4% -2.1% 2.1%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
57Copyright Advito 2012
Hotel Rate Developments: Top cities in Canada & Latin America
Inflation is affecting Buenos Aires with the highest ADR increases. Brazil’s economic boom is also affecting their hotel rates
Canada & Lat.Am 2010 2011ADR Local Currency 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Bs. Aires ADR 526 548 574 674 667 674 753Y-o-Y -14.8% -7.4% 4.4% 13.4% 26.8% 23.0% 31.2%
Lima ADR 498 460 478 512 530 561 536Y-o-Y -19.7% -9.9% -2.9% -0.8% 6.5% 21.9% 12.1%
Mexico City ADR 1805 1723 1706 1673 1709 1595 1665Y-o-Y -17.4% -9.1% -12.3% -9.4% -5.3% -7.4% -2.4%
Montreal ADR 143 164 167 153 148 163 162Y-o-Y -4.4% 11.0% 6.0% 1.6% 3.1% -0.6% -2.7%
Rio ADR 328 324 314 330 355 360 373Y-o-Y -9.7% 8.8% 9.8% 12.0% 8.3% 11.3% 18.9%
San Jose ADR 76435 72840 74371 73623 75448 77334 74853Y-o-Y 0.6% -3.0% 7.7% 1.5% -1.3% 6.2% 0.6%
Santiago ADR 100117 93344 81930 93463 84601 88655 90939Y-o-Y -10.0% 0.6% -6.8% 14.5% -15.5% -5.0% 11.0%
Sao Paulo ADR 283 276 265 264 302 325 332Y-o-Y 3.1% 7.1% 10.9% 6.9% 6.9% 17.7% 25.1%
Toronto ADR 150 164 160 160 153 161 164Y-o-Y -8.0% 5.8% 3.0% 5.0% 2.0% -1.9% 2.4%
Vancouver ADR 181 170 180 163 153 177 182Y-o-Y 15.9% 6.4% 2.6% 7.2% -15.2% 4.0% 1.0%
Source: Advito 2012 Industry Forecast Update, Feb. 2012
58Copyright Advito 2012
3.9%
4.0%
4.0%
47.7%
48.4%
47.5%
13.0%
12.5%
11.4%
32.6%
32.3%
33.9%
1.6%
1.6%
1.7%
0% 20% 40% 60% 80% 100%
2011 YTD
2010
2009
% of Room Nights
Tier Distribution
Luxury Upper Upscale Upscale Mid Scale Economy Mixed
Tier Distribution
The upscale market has been slowly reclaiming its market share while the Upper Upscale segment retains the largest corporate market
United States
Source: Advito 2012 Industry Forecast Update, Feb. 2012
59Copyright Advito 2012
Hotel Supply Growth
For 2012, most new hotels in the US are planned for NY, while in Europe, UK is getting a third of new constructions (Olympics)
United States
Source: Advito 2012 Industry Forecast Update, Feb. 2012
Top Related