As the demand for business travel services is predicted to outweigh capacity this year, expect rates for airfares, hotel and car rentals, and corporate meetings and events to continue to climb.
According to American Express’ annual Global Business Travel Forecast , North American business travelers should see airfares increase as much as 5% for domestic/short-haul flights and 5% to 10% for international/long-haul flights; hotel rates and car rental costs are forecasted to grow 4% to 8% and 2% to 4%, respectively.
What’s driving up these prices? For airfares, factors include increasingly sophisticated airline pricing technology as well as premium pricing for in-demand seats. In the hotel sector, demand continues to exceed supply in key markets, possibly pushing rates up by 14% in key U.S. cities.
To handle these increasing costs, American Express Business Travel suggests changing travel behavior in key areas, including:
Lowering use of refundable airfares.
Optimizing use of advance purchase fares.
Narrowly defining when first and business class fares can be used.
Driving online bookings.
Improving use of preferred suppliers, especially hotels.
Source: American Express’ 2008 Global Business Travel Forecast, www.americanexpress.com .