AMEX: Business Travel Costs Up in Strong Markets
Expect the cost of business travel to rise substantially in the world’s strongest economies, while it experiences only slight increases in the United States. That’s the verdict according to American Express Global Business Travel which released its Global Business Travel Forecast 2013 earlier this month.
“We are expecting a dynamic landscape for business travel in 2013,” says Herve Sedky, senior vice president and general manager of Global Business Partnerships and Premium Services for American Express Global Business Travel. “Prices [are] likely rising to reflect companies’ interest in doing business in growing economies such as Brazil, India, and Russia, but staying flat or even declining in those markets where growth is stagnant.”
Domestic U.S. travel is expected to increase slightly for business people in the next year, according to the report, with airfares rising no more than 4 percent across all classes. With construction lagging and fewer new properties in the pipeline, hotel rooms figure to undergo large hikes–up to 9 percent in higher-scale hotels. Meanwhile, increased competition among car rental agencies will drive rates down.
A different story is emerging for Latin America however, as “continued economic growth and middle-class consumer demand are predicted to drive increases.” Airfares (between 3 and 10 percent, depending on class) and hotel room rates (“mid-single digit[s]”) are both expected to go up. The study notes that the “majority” of growth is expected from Brazil and Argentina.
In Europe, financial uncertainty has travel pricing estimates calling for slight increases or even declines in some of the harder hit markets, like Spain. Long-haul economy fares may drop by as much as 8 percent on Spanish airlines. Several Eastern Eastern European countries, like Russia and Poland-distant from the center of the crisis—-are likely to cancel out the declines of their Western Western counterparts with moderate rate increases however.
Growth in the Asia-Pacific zone varies by country, as Australia and India look to experience the greatest hikes and Chinese costs remain stable.
Meanwhile, South African travel prices are expected to grow steadily, the report states, “thanks to its positioning as the gateway to southern and western Africa and the natural resources based in those regions.”