Hotel rates will continue to decline while airfares will increase slightly in 2010. That was the projection from American Express’ 2010 Global Business Travel Forecast, which was released on September 30.
The study, produced by eXpert insights, a new research practice of American Express Business Travel’s Global Advisory Services, also predicts that budgets for events and conferences—which have been notoriously tight in 2009—will begin to loosen slightly in 2010 and possibly even increase 1 percent to 2 percent for North American and Latin American companies. In addition, formal oversight of meeting planning and meetings spend will become increasingly critical to companies in the coming year, and virtual technologies will play a pivotal role in a company’s meeting strategy, according to Amex.
While hotel rates will continue to drop—1 percent to 4 percent for mid-range hotels, and 3 percent to 6 percent for upper-range properties—airfares are expected to climb in 2010. The forecast estimates that domestic and short-haul economy airfares will increase by 2 percent to 7 percent, while international and long-haul business class fares will rise by 3 percent to 8 percent for U.S. travelers.
Although 2009 was marked by travel cutbacks, Amex expects the pent-up demand for business travel and meetings to be unleashed in 2010. Overall, business travel costs are expected to remain fairly stable next year for domestic trips, while the cost of international travel is expected to rise by 3.5 percent, or $117 per trip.
“However, as unbundled and ancillary fees continue to add to the cost of trips, businesses should expect to add up to an estimated 15 percent to the total trip cost for air, hotel, and ground-transport elements alone,” said Hervé Sedky, vice president and general manager, AEBT.
Sedky also expects the recession to result in a long-term shift in travel buyers’ attitudes. “Companies will remain smarter buyers when it comes to travel. They will look at [business travel] less as a cost, and more as an investment,” he said.
Now is the time for companies to make improvements to their business-travel policies that will last long after the market recovers, noted Frank Schnur, vice president, Global Advisory Services for Amex. “It’s about making changes to your [business travel] policies now … when employees are receptive to the current economic conditions. Get them to travel smarter, for the right reasons, for the right prices, and in the right way.”