October 27, 2010

American Express Business Travel is predicting increases in both airfare and hotel rates around the world, according to the 2011 Global Business Travel Forecast released last Wednesday. The travel management company is calling for the return of pre-recession prices, based on continued economic growth, increased demand and constrained capacity. Airfares in North America are expected to increase between 2 and 6 percent for domestic/short-haul flights, and 3 to 7 percent for international/long-haul (business-class) flights. The fare increases could be slightly higher in other regions, with Latin American fares forecast to rise 3 to 7 percent for domestic travel and 3 to 8 percent for international trips. European flights could rise even more, with a 4 to 9 percent hike and 5 to 9 percent increase for domestic and international flights, respectively. Leading the pack is likely to be the Asia-Pacific region: Although domestic fares are expected to rise only 3 to 8 percent, the long-haul trips common to the region could post a fare increase of 5 to 10 percent. For most of the world, hotel rate hikes of 1 to 5 percent are predicted for mid-range properties, and 2 to 6 percent for upper-range hotels. In the Asia-Pacific region, however, those increases could be as high as 5 to 10 percent for both mid-range and upper-range hotels. With respect to meetings, Amex forecasts that companies likely will spend more and hold more meetings, overall. But they probably will spend less per meeting, due to decreased meeting size and improved efficiencies. Amex is predicting more local and regional gatherings to occur, with fewer amenities than past years. Audiovisual services, according to the forecast, are likely to be an exception, however, as investments in virtual meeting technology are expected to rise.