What goes up must come down, right? That might not be the case for business travel costs, at least not next year. According to the new American Express Global Business Travel Forecast, an average business trip (including airfare, car rental, and hotel stay) will hit $1,110 in 2008, 6 percent more than 2007. International trips will increase by 7 percent to $3,171.
“Globally, three factors drove up the cost of business travel in 2007,” said Mike Streit, vice president andleader for American Express Business Travel Advisory Services, during a teleconference on the findings. “Airlines operated at full capacity, the price of oil continued to rise, and hotels remained at record-high occupancy levels. In 2008 … these again will be the leading pressures causing fares and rates to increase.”
Costs are expected to rise across the board, with North American hotel rates increasing in midrange properties by 4 percent to 7 percent, and in upper-range hotels by 5 percent to 8 percent. Airfares within the United States are expected to increase by 1 percent to 5 percent, while international business fares from the United States are predicted to rise by 5 percent to 10 percent.
Consequently, meeting spend is expected to go up by 8 percent to 10 percent in 2008, continuing a trend that saw American Express clients spending 34 percent more per meeting in the first half of 2007 than they did in 2006. While hotel room rates accounted for much of the dramatic increase, “another reason is company behavior,” said Chris Wilkes, meetings management advisory services practice leader. “For some companies, it meant traveling for longer periods of time; for others it meant including more attendees. Either of these will very quickly drive up total costs.”