Airfares and hotel room rates increased substantially in 2006, according to the 2006 Business Travel Monitor, which was released Monday by American Express Business Travel.
In the case of domestic air travel, 2006 marked the first time since 2001 that average airfares paid by corporate travel buyers hadn’t decreased over the year before. By the end of 2006, the average airfare paid had jumped to $231 from $216 in 2005. “Capacity constraints, strong demand, and high fuel costs prompted transient travel prices to climb in 2006,” said Mike Streit, vice president, American Express Business Travel Advisory Services, in a press release.
The average international airfare paid by corporate buyers increased dramatically as well. The average fare by the end of 2006 was $1,707--$103 more than the average rate paid in 2005. This marked the second consecutive year--after several years of relatively flat rates--that average international rates increased by $100 or more.
The hotel industry seller’s market continued unabated in 2006. According to American Express, domestic rates increased by an average of slightly less than 10 percent, with the largest increase of 19 percent found in the budget hotel category.
“Budget hotel rates increased to such high levels because they are trying to attract more of the business travel market,” said Streit. “They are heavily investing in capital improvements, such as room renovations and adding in-room amenities, in order to better position themselves competitively as occupancy rates remain high and companies start to trade down to lower-cost alternatives within their hotel program.”
Average international hotel rates increased by 8.5 percent in 2006.