Business Travel Tips

Based on forecasted economic conditions for 2009, airfares may decrease next year. That is one of the findings included in the Global Business Travel Forecast and Trends, the annual report by American Express Business Travel, published today.

The report also evaluated the impact on Business Travel of market activities that have occurred over the last 30 days.

In certain markets, the Forecast predicts a negative increase in 2009 to airfares and hotel rates. However, this doesn’t necessarily correlate to a decrease in prices paid as airlines continue their pursuit of expanding the suite of fees charged for services such as in-flight meals and baggage.

Hervé Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel, says: “Considering airfare, car rental and hotel stay, we expect the average domestic trip to increase 2.8 percent, or $31 USD, to a total of approximately $1139 USD. An increase of 4.3 percent, or approximately $147 USD, is expected for international trips to bring the average cost to $3556. However, if you include the costs of additional travel expenses including baggage fees, dining, airport parking and even package shipping, it can add an estimated $400 to the total trip cost.”

Below the report summarized.

- Global Business Travel Forecast -

 
- Global Airfare Forecast -

The proliferation of new fees and a delicate supply and demand balancing act
will determine whether airfares remain steady, increase or potentially decrease
compared to 2008.

“In response to the record energy prices in 2008,
many airlines began charging fees for different services such as checked
luggage, in-flight refreshments and aisle seating. To help mitigate the impact
of these new charges, which can increase air travel costs up to an additional 15
percent per trip, we advise companies to consider increasing their focus on
demand management to ensure planned trips meet the guidelines designed to
promote the most effective use of their business investment,”
continued Sedky.

• Capacity cuts are likely to lead to a
  shortage of available seats at lower price points, while changes in ticketing
  and minimum-stay requirements, uncertainty surrounding the future price of jet
  fuel, movement in airline consolidation and alliances and tighter controls
  over contract performance measurement are likely to drive price increases.
• Prices are predicted to experience downward
  pressure due to a slowing global economy, improved demand management by
  corporations and stronger traveler compliance. The expansion of low-cost
  carriers, more efficient aircraft and airline operations and the continued
  liberalization of the industry are also expected to mitigate increases.

- Global Hotel Rate Forecast -

Although American Express Business Travel forecasts some rate growth in the
global hotel industry, most regions will likely experience declines in
occupancy, which will keep rate increases below the level of those seen in 2008.

• The record oil prices that began in 2008
  are expected to continue to impact the hotel industry and airline capacity
  cuts should drive down demand in some markets.
• As new hotels expand global supply and
  demand decreases in some markets, travel buyers should have increased
  bargaining power for 2009 rates.

- Strategic Meeting Management Forecast -

As economic conditions continue to draw attention to meetings as a source for
savings, senior business leaders are expected to seek further visibility into
meetings spending and aim to measure the return on investment of meetings and
events for their companies.

• Effective demand management tactics and a
  movement toward shorter events in more local destinations should help
  corporations achieve the best return on investment.
• Implementing and managing meetings policy
  is expected to provide companies the ability to drive certain cost-saving
  behaviors. Based on a recent survey of American Express clients, over 70
  percent of companies do not have a stand alone meetings policy.
• Technology developments offer
  cost-effective ways to supplement meetings and events schedules.
  Teleconferencing and social networking sites are gaining popularity as tools
  to strengthen the interpersonal relationships created through traditional
  meetings.
• Leveraging transient hotel programs with a
  meetings hotel program is expected to enable companies to have visibility in
  both areas and drive savings. Negotiating packages for the preferred
  properties will likely simplify the process to drive and support compliance.

- Cost Containment Strategies for 2009 -

Companies across the globe are seeking new ways to manage their travel
investments and maximize the value of their T&E programs.

• Companies should revisit their travel
  policies to ensure that travelers have a comprehensive guide to navigate the
  current travel environment.
• In addition to a tight travel policy,
  demand management and an increased focus on traveler compliance can deliver
  savings.
• Benchmarking that is based on average
  segment cost or average ticket price is no longer sufficient due to the
  expansion of airline fees. Companies should benchmark the entire cost of a
  trip in an effort to minimize expenditures related to business travel.

- Regional Highlights -

 
North America – Air/Hotel/Car Forecast and
Trends

The expected global economic slowdown may lead to a slowing growth of demand
for available seats on a plane, and when coupled with the unbundling of airline
service fees from base fares, it is likely that in North America, a decrease in
airfares could occur.

 
Europe – Air/Hotel/Car Forecast and Trends

 
Latin America & the Caribbean (LAC) –
Air/Hotel/Car Forecast and Trends

(source)