Business travel set for continued recovery
American Express Business Travel have released figures that indicate strong price increases in the global business travel industry and suggests a more challenging corporate travel buying market in the year ahead.The 2006 Global Business Travel Forecast is a comprehensive analysis forecasting both airfare and hotel trends as well as published price predictions for the coming year regionally and globally. The survey is made available annually to American Express Business Travel clients and is generated by American Express Consulting and eCLIPSE Advisors.
An overview of the report suggests that although the pace varies significantly by region and country, published air and hotel prices worldwide are expected to rise considerably next year as business travel demand recovers in step with the global economy, outpacing the growth of supply in many markets. Regions of strong business travel demand include Europe, North America and Japan, Asia-Pacific and Australia, with significant traffic in the trans-Pacific and trans-Atlantic markets. Published air and hotel rates will increase as suppliers feel intense pressure to recover losses, soften the effect of skyrocketing fuel costs, and in some cases even grow profits. While pricing pressure remains across the airline industry, continuing competition from low-cost carriers may limit airlines’ ability to raise fares in many markets.
Globally for 2006, American Express Business Travel forecasts domestic/short-haul, economy class fares will rise by three to six percent and international/long-haul business fares increasing by three to five percent. On the hotel side, room rates overall for mid-range properties will increase by one to three percent, while upper-range properties will increase by three to five percent.
“Corporate clients are traveling more, and increased globalization is leading to strong demand for long-haul air travel and hotel space at their travelers’ destination. Whilst global fares are rising across the board there are significant variations by region and even the countries within those regions,” commented Matthew Davis, Director of Global Consulting at American Express.