Travel costs set to rise in 2010
By Susan Avery -- Purchasing, 11/19/2009 2:00:00 AM
Costs of business travel may rise by the end of 2010, according to the American Express global business travel forecast.
Most likely to impact costs next year are business class airfares, due to reduced airline capacity and ongoing business demand for international travel.
"Considering airfare, hotel, and ground transportation, we expect the average domestic business trip to increase 1.2%, or $13, to a total of approximately $1,080," says Herve Sedky, vice president and general manager, American Express Business Travel in New York.
"An increase of 2.4%, or approximately $67, is expected for international business trips to bring the average cost to $2,818," he says. "However, as unbundled and ancillary fees continue to add to the cost of trips, businesses should expect to add up to an estimated 15% to the total trip cost for air, hotel and ground transport elements alone."
Weak demand for travel helped keep prices low in 2009, most notably for hotel rooms. As an industry, hotels cannot reduce capacity as well as airlines and car rental companies. Following this weakened demand in 2009, American Express Business Travel expects a pent up need for travel and meetings to be unleashed in 2010. Fuel prices, along with sustained signs of a restarting economy, could also generate slight upticks in travel category prices worldwide, particularly in Asia Pacific.
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