2015 Energy, Resources and Marine ForecastDecember 2014

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INDUSTRY INSIGHT from our sponsor

The 2015 Energy, Resources and Marine Forecast has been designed to provide essential information tailored to the intricacies of our specialized industry. We highlight trends ranging from economic factors to safety and security updates and provide expert advice to help ensure your travel program thrives in 2015.

So, what does the 2015 landscape look like? With oil prices currently at a five-year low, many companies are facing mounting cost pressure, looking for new ways to operate more efficiently and re-evaluating their travel policies. Data and proactive change management communication will be

key. We foresee organizations encouraging their travelers to consider the lowest logical airfare and increasingly conducting business from new low-cost markets, making traveler safety and security a continued key focus in 2015. Trusted supplier partnerships will be vital in making sure your travelers receive the appropriate support on location; additionally, these partnerships help companies secure good prices when negotiating room rates and air fares. Companies will increasingly deploy virtual payment solutions as a secure, PCI-compliant way to manage hotel payments in high-risk destinations, while new technologies will automate many of the time-consuming tasks buyers have traditionally managed manually.

We hope this publication, in conjunction with our 2015 Global Travel Price Outlook, will prove a valuable resource for you, both today as you plan for 2015 and throughout the year as you continue to evaluate and optimize your travel program.

On behalf of our entire team, thank you for the continued trust you place in CWT Energy, Resources & Marine.

Monisa ClineSenior Vice PresidentCWT Energy, Resources & Marine

WELCOME

As a strategic partner that provides access to approximately 130 oil and gas

destinations worldwide, Delta Air Lines is pleased to sponsor the 2015 Energy,

Resources & Marine Forecast.

Looking to 2015, the future of air travel will continue to be shaped by innovation and

service. At Delta, well move forward with plans to restructure our fleet, both to enhance

the traveler experience and to improve cost efficiencies. To meet the specialized needs of the

energy industry, well leverage our presence in multiple oil and gas markets in the Americas and

offer service from conveniently positioned hubs that easily connect the transatlantic network to all major

European, Middle Eastern and African oil capitals.

As always, traveler safety and security will remain a top priority at Delta. You can rely on Delta to mitigate

travel risks through a robust infrastructure of resources, operational reliability, an expansive schedule offering along with our airline partners and a premium suite of customized services that are designed to enhance your travelers experience throughout their journey.

Bob Somers, Vice PresidentGlobal Sales, Delta Air Lines

The 2015 Energy, Resources and Marine Forecast by CWT Energy, Resources & Marine is a supplement to the 2015 Global Travel Price Outlook, which was produced jointly by Carlson Wagonlit Travel in partnership with the GBTA Foundation.

32015 Energy, Resources and Marine Forecast

Key pointsl Global growth continues to strengthen as a result of U.S.,

Asia Pacific and other advanced economy expansion. l Emerging market performance is mixed, based on slower

exports, higher domestic inflation, flat-to-falling commodity prices and financial imbalances.

l Global GDP growth (at 3% in 2013) is expected to reach 4% by 2015, largely driven by emerging market expansion. However, the gap between emerging and advanced economies will continue to narrow.

l Emerging markets have been tested by a weaker external environment (Brazil and Russia), credit imbalances (China and Turkey), rising inflation (India and Argentina) and slower investment growth driven by higher interest rates and reduced foreign investments.

Meanwhile, despite a tough winter storm season in Q1 2014, the U.S. economy has slowly gathered strength. Europe continues its sluggish emergence from recession, and other advanced economies are gradually accelerating. The good news is that generally improving economic conditions worldwide should benefit all.

6%5%4%3%2%1%0%-1%

Annual percent change in real GDP*

ASIA

-PAC

IFIC

SUB

- SA

HAR

AN

AFRI

CA

MID

EAST

-N

. AFR

ICA

EMER

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N

AMER

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NO

RTH

AM

ERIC

A

WO

RLD

GLOBAL GROWTH IMPROVING

2012

2013

2014

2015

2016-18

*Source: Organization for Economic Co-operation and Development, IHS Global Insight, Rockport Analytics

Source: CWT-GBTA Foundation 2015 Global Travel Price Outlook.

GLOBAL MACROECONOMIC OVERVIEWGlobal GDP

to reach

by 20154%

2015 Energy, Resources and Marine Forecast

Growth in demand for petroleum and other liquid fuels is most significant in China, India and the Middle East. Conversely, demand for liquid fuels in regions with well-established oil markets such as the U.S. and Europe appears to have hit a plateau.

Since 2008, growth in North America has brought more than 4 million barrels per day (MMbbl/d) of additional liquids supplies to market, according to U.S. Energy Information Administrations International Energy Outlook 2014. In comparison, that increase has largely been offset by geopolitical difficulties in Libya, Iran, South Sudan and Syria, which is causing supply disruptions. The result is uncertainty around mid- and long-term projections.

However, with Exploration and Productions Price Perspective revealing the price of Brent crude fell by nearly a third between June and December 2014, short-term predictions are that the disruptions will not impact supply for some time.

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SECTOR OUTLOOK

Growing supplies of tight oil (oil found in reservoirs with very low permeability) and shale oil in the U.S. bringing new resources to market

Legislative change in Mexico reverses the trend of slowly declining oil production

Progress with extraction technologies$

Return to higher sustained oil prices

Large production increases in Brazil, Argentina and elsewhere to ensure availability of liquid fuel supplies for many years

The futures bright for the energy industry*

*Source: U.S. Energy Information Administrations International Energy Outlook 2014

SECTOR OUTLOOK

In the mining industry, a decade-long decline in productivity has resulted in commodity prices continuing to soften, margins being cut and fewer areas to look to for profitability.

Global demand for energy is expected to increase 36% by 2025*, which is expected to create new challenges due to falling ore grades.

As such, organizations are shifting internal structures and looking for new markets from which to conduct business. Access to water and energy should remain a priority for companies establishing new projects in African and South American destinations, as should gaining and maintaining support from communities impacted by a project.

In 2015, we expect the shipping industry to remain highly competitive, with a forecasted alignment between supply and demand stemming from an increasing but fragile return of consumer confidence.

*Source: Business risks facing mining and metals 20142015, Ernst and Young.

Additional information taken from the U.S. Energy Information Administrations International Energy Outlook 2014; Business risks facing mining and metals 20142015, Ernst and Young; and A Price Perspective, Exploration & Production 2014.

5think4photop / Shutterstock.com

Top 10 challenges the resources industry faced in 2014*

1 Productivity improvement2 Capital dilemmas3 Social license to operate (SLTO)4 Resource nationalism5 Capital projects6 Price and currency volatility7 Infrastructure access8 Sharing the benefits9 Balancing talent requirements10 Access to water and energy

62015 Energy, Resources and Marine Forecast

8%7%6%5%4%3%2%1%0%-1%

FLYING HIGH - AIR PROJECTIONS FOR 2015

8%7%6%5%4%3%2%1%0%-1%

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2.6

3.2

1.61.4

2.7

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7.2

3.0

3.8

1.0

6.97.2

-0.6

3.7

0.3

5.1

1.3

-0.5

1.0

2.4

Source: CWT, GBTA Foundation, Rockport Analytics

Europe, Middle East and AfricaAirlines will continue to develop new routes to destinations in Africa and South America as organizations in the energy, resources and marine industries target business in lower-cost markets. As such, in 2015, we predict inflated airfares of up to 7.2% in destinations such as Lagos and Luanda.

Moving south to Cape Town, average air price increases of 6.9% are expected as a result of the national carrier phasing out larger aircraft. These increases will come despite other international carriers introducing A380 routes to cope with demand from leisure travelers. Russias Sakhalin will develop into a prime sellers market as demand from energy, resources and marine companies increases exponentially. Riyadh, a major origin destination, is expected to see average price increases of up to 3.7%.

We anticipate that Hamburg will see a drop of 0.7% across economy and business class. However, it remains the offshore industrys leading gateway and boasts steady demand, so economy prices are expected to increase by 2.5% despite easyJet launching a base to rival German Wings.

AmericasDemand is up in South America, and Caracas and Rio de Janeiro will see price increases of 5.1% and 3.8% respectively. There will be fewer flights to Venezuela, driving an increase in chartered flights. Double-digit inflation in Argentina will also impact organizations with interests in Buenos Aires.

Buyers can expect inflated airfares of up to 7.2% in Lagos and Luanda.

FLYING HIGH - AIR PROJECTIONS FOR 2015

2015 Energy, Resources and Marine Forecast 7

Houston will offer some relief as more and more global carriers now offer service there, driven primarily by the energy industry. We expect that increased competition for suppliers will lead to price decreases of 0.6%. Turkish Airlines recently added business class seats on its Houston route, Emirates is increasing capacity and China Air has launched daily nonstop flights. Korean Airlines is also new to the market, and SAS has added a nonstop service.

Asia PacificIn Intra-Western Australia, carriers scheduled available seat kilometers will decrease by 10% in 2015, driven by an over capacity in 2014 and expected softening in mining sector growth. As a result, fares from Perth are expected to increase by 4.2% in 2015. In Shanghai, we expect a 1% price increase after two years of 3-5% gains. This trend is driven by a slowing domestic economy as well as more competition from high-speed rail between regional city pairs. Recent reforms and the liberalization of GDSs in China will also help promote competition and temper airfare increases.

2015 Energy, Resources and Marine Forecast

FLYING HIGH - AIR PROJECTIONS FOR 2015

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TOP TIPSLow-cost carriers still chase corporate business Carefully consider if adding carriers benefit or dilute your travel program.

Airline consolidation Work with suppliers to shift volume accordingly and increase buying power.

Ancillary fees and fuel surcharges Factor these into negotiations, as they represent a significant percentage of the total flying cost.

Automated bulk crew travel bookings and workforce management Understand how these tools can drive benefits and efficiencies.

$

Airlines will continue to develop new routes to destinations in

Africa and South America.

92015 Energy, Resources and Marine Forecast

STAYING THE COURSE - HOTEL PROJECTIONS FOR 2015

16%14%12%10%8%6%4%2%0%-2%-4%

16%14%12%10%8%6%4%2%0%-2%-4%

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6.2

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0.3

4.2

0.91.7

4.3

6.0

-1.8

0.2

15.2

-2.0

4.5

-1.0

Source: CWT, GBTA Foundation, Rockport Analytics

Europe, Middle East and AfricaMany hotel companies will focus on developing markets like Africa and South America as organizations seek opportunities to expand into new low-cost markets.

Safety and security of travelers in the energy, resources and marine sector remains a priority, particularly in developing markets such as Lagos. Thus, hotel prices will remain high as organizations expect to pay a premium for trusted supplier partners. Buyers can expect price increases of 3.4% in Lagos, while Kenya, Mozambique and Tanzania will also see higher demand and corresponding price increases. Luanda, an increasingly popular destination for energy, resources and marine organizations, continues to feel the impact of economic sanctions and resulting inflated hotel prices.

Destinations like Dubai are building more budget accommodation options, which helps keep upscale prices competitive. In Paris, several upscale hotels will reopen in 2015 following refurbishment, leading to greater competition and lower prices as competition increases.

AmericasPrices are rising, particularly in South America, where Caracas and Rio de Janeiro will see increases of 15.2% and 9.1% respectively when midscale and upscale properties are reviewed. High inflation in Caracas and major sporting events in Rio are the primary causes. In Mexico, privatization of the state-owned oil company will allow for outside investment.

2015 Energy, Resources and Marine Forecast

STAYING THE COURSE - HOTEL PROJECTIONS FOR 2015

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New budget accommodation options in Dubai will keep upscale hotel prices competitive.

think4photop / Shutterstock.com

In North America, Houstons expansion outside of the city center will eventually have a positive effect on pricing for buyers, but for the moment, lagging supply will drive an average price increase of 6% in 2015. Additionally, Calgary will see inflated rates prompted by strong demand from oil companies and limited supply, which we expect to continue for the foreseeable future.

Asia PacificWith the Western Australian mining market slowing down, Perth and surrounding markets will see a 0.3% decrease in prices. However, the pickup in energy and marine offshore activities may cause demand to improve and stabilize. Malaysia and Indonesia are still showing a good economic growth and rising inflationary pressure. Jakarta and Manila will see the highest increases based on strong demand 4.5% and 4.3% respectively. However, as more hotel openings continue to be announced, especially in Jakarta, the rate of inflation may slow over time.

Caracas and Rio de Janeiro will see increases of 15.2% and 9.1% respectively.

2015 Energy, Resources and Marine Forecast 11

TOP TIPSCompliance is still a key issue, particularly in new markets. Virtual cards offer a secure, PCI-compliant way to manage hotel payments.

Hotels have begun charging more for high-speed internet. Encourage travelers to join preferred supplier loyalty programs for favorable rates.

With less available real estate and long build cycles, consider alternative accommodations like campsites or converted ships.

Many corporate contracts now include fifth seasons and fair rates during blackout dates, so be proactive when negotiating contracts.

STAYING THE COURSE - HOTEL PROJECTIONS FOR 2015

122015 Energy, Resources and Marine Forecast

Engage with travelers

Create a feedback channel to gather information on traveler experience, preferences and more to gain their buy-in and promote compliance.

Focus on safety and security

Ensure your program includes destination intelligence, traveler tracking capabilities, medical assistance and repatriation support.

Build a policy that supports company culture

Tailor your program to your organization by either recommending or mandating the use of preferred booking channels. In this way, you will steer your travelers toward your preferred suppliers and ensure all reservation data is captured.

Communicate effectively

Communicate your policy to all stakeholders to explain how it supports your company objectives. You can also enhance the traveler experience by promoting online and mobile booking.

Make compliance an ongoing focus

To ensure success, track and monitor compliance via key performance indicators.

Automate messaging

Use tools like CWT Program Messenger to deliver targeted messages directly to travelers and help them make informed, policy-compliant decisions. By delivering messages before reservations are ticketed, you can mitigate non-compliant travel.

CREATING A STRONG PROGRAM FOR 2015 Secure support from upper management

Executive support for your program will be essential as you seek to promote compliance and manage traveler behavior.

Maria Hetting / Shutterstock.com

132015 Energy, Resources and Marine Forecast

2015 RECOMMENDATIONS

INCREASED USE OF LOW-COST AIRLINES European low-cost carriers are increasing capacity at 14 times the rate of legacy carriers. Consider budget airlines to control costs and ensure options and availability for travelers.

GREAT CREW CHANGE Half of the industrys experienced personnel are expected to retire this decade; tailor your travel policy as a strategic talent recruitment tool.

VIRTUAL PAYMENT Virtual payment solutions will become prevalent in 2015, as will end-to-end payment options that promote data capture, compliance and greater reconciliation and control.

DOOR-TO-DOOR BOOKING Online full-trip bookings are popular with energy, resources and marine companies. Ask your travel management company to integrate non-traditional hotel content, charter helicopters and air transport in 2015.

MOBILE BOOKING In the next two years, we expect corporate travel reservations being made on mobile devices to double.* Approved, policy-compliant apps like CWT To Go will allow your travelers to book seamless end-to-end trips.

LOWEST LOGICAL FARE To be more cost-effective, consider amending your policy to encourage travelers to choose the lowest logical airfares.

$

*Source: Tap into mobile service: Managed travel in the digital economy, 2014. CWT Travel Management Institute

COMPLIANCEMitigate the risk of bribery and corruption issues by making compliance a top priority. Manage spend centrally where possible and partner only with reputable suppliers.

2014 CWT

MethodologyThe projections in the 2015 Energy, Resources and Marine Forecast were formed from the combination of:l A statistical model, developed by market and economic research firm, Rockport Analytics, that evaluates historical price behavior and forecasts future

price references l The market-specific expertise and travel industry knowledge of CWT personnel worldwide l Macroeconomic information sourced from Moodys Analytics, the International Monetary Fund Research Department, the United Nations and others

Projections were derived based on the transaction data of CWTs global client portfolio, including clients travel footprints and patterns, over the past six years. Key macroeconomic and per-country indicators, such as current and expected gross domestic product (GDP) growth, the consumer price index, unemployment rates and crude oil prices, were used in the statistical model, as well as key supply-side drivers sourced from OAG and STR Global. All air statistics represent Point of Origin and include all trip types (long and short haul/domestic, continental and intercontinental).

In addition to the modeling process, data from GBTAs Travel Manager Sentiment survey were analyzed. The online survey was conducted of corporate travel managers in Asia Pacific, Europe, Latin America and North America and includes members and non-members of GBTA. Fielding of the survey took place from February 12 to March 5, 2014. An email invitation was sent to 6,400 travel managers around the world. A total of 624 travel managers completed the survey, for a response rate of 10%.

About CWT Energy, Resources & MarineCWT Energy, Resources & Marine provides specialized travel management solutions for organizations operating in oil and gas, diversified resources and mining, offshore, marine services and alternative energies. Building on more than 30 years of experience, we work closely with clients worldwide to find the right solutions for their complex travel needs, providing first-class service and leading-edge technology and products.

For more information contact CWTERM@carlsonwagonlit.com, or visit www.cwt-energy-resources-marine.com