Airfares expected to jump again in 2008
Amex annual outlook also sees inflation in room rates
By Susan Avery -- Purchasing, 10/24/2007 10:11:00 AM
Demand for corporate travel services will continue to outpace supply—driving prices up for air, hotel, car rental and corporate meetings and events in 2008, according to the American Express Global Business Travel Forecast. Expected to experience the biggest of the increases are airfares worldwide and hotel room rates.
The forecast shows domestic/short haul (economy class) airfares in North America rising 1% to 5%. Hotel rates could climb 4% to 7% for mid-range rooms and 5% to 8% for upper-range rooms. While fuel costs, improvements in airline inventory and pricing technology, capacity constraint and demand for long haul fares are likely to drive increases in airfare, greater competition through the USA-EU (European Union) Open Skies Accord will temper the hikes.
Strong demand and slow supply growth are likely to force up hotel room rates. Since guestrooms account for nearly half of all meeting spend (excluding airfare), rates are likely to contribute to an expected increase of 8% to 10% in global meeting spend.
“Travel managers and procurement professionals can expect another capacity-restricted, challenging year and a continued push to keep travel and entertainment budgets in check. However, opportunities still exist to further control costs without curtailing business travel,” says Mike Streit, vice president and global leader for American Express Business Travel Advisory Services in a statement.
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