Improving economies, lower gas prices and stronger demand will all contribute to moderate business travel price increases in the coming year, according to the American Express Global Business Travel Forecast,
released Monday. The company's 12th annual forecast follows the Meetings & Events forecast released earlier this fall.
The forecast calls for North America to continue its 2015 momentum with continued price increases, particularly with respect to hotel rates, with more moderate gains to occur in Europe and the Asia Pacific region. Business-class airfare in North America is expected to rise from 0.4 to 2.9 percent. Economy-class seat cost should be kept more in check, with short-haul flights predicted change from -1.5 percent to 1.1 percent, depending on the region and destination. Long-haul economy flights should increase a bit more, from 0.7 to 2.7 percent.
Car rental rates should be largely flat overall in North America, particularly for larger companies with negotiation leverage. Overall, Amex predicts a change of between 0 and 1 precent.
North American hotel rates will experience the largest increase, with mid-range properties expected to increase from 3.8 to 6 percent and upper-range expected to rise from 4.2 to 6.3 percent. This will be true particularly in most large markets, where new supply has yet to have a significant effect on the demand.
In Latin America, airfares are expected to come down a bit while hotel rates in the stronger economies -- Mexico, Peru and Colombia, in particular -- should experience moderate hikes. For the region overall, mid-range hotels are expected to see rate increases of 1.3 to 4.3 percent, while upper-range properties could rise by 1 to 3.5 percent.
Amex predicts business-class short-haul airfares in Europe to remain fairly stable; overall, the rates are expected to change by -1 to 2 percent. Less competition in the Middle East and Africa means short-haul business class could rise by 2 to 5 percent overall. Long-haul business class is expected to rise by 1 to 3 percent for both regions. Economy flights in Europe will be most affected by competition, and are expected to drop by as much as 3 percent for long-haul flights. In the Middle East and Africa, short-haul fares could rise by as much as 3 percent while long-haul economy tickets remain flat. Mid-range hotel rates in both regions are expected to increase by 1.7 to 3.3 percent, while upper-range hotel rates go up by 1.8 to 3.5 percent.
In the Asia Pacific region, Amex expects domestic airfares to experience the strongest growth, from 1 to 3.5 percent, while international and among Asia Pacific nations the fare hikes should be slightly smaller. Mid-range hotel rates in the region are expected to rise 1.3 to 3.7 percent, and upper-range room rates could go up b 1.6 to 4 percent.
"Travel managers are operating in an era of new challenges and evolving disrupters," added Caroline Strachan, American Express Global Business Travel vice president of consulting. "In addition to handling tasks such as measurement and compliance, new factors such as the sharing economy and mobile booking channels are becoming increasingly popular for business travelers. In order to thrive in this digital era, travel managers need to be aware of and dynamically adapt to these forces across a variety of geographies."
For more details or to purchase the forecast, interested parties should email GlobalBusinessConsulting@aexp.com