AMEX Forecasts Lower Air Fares, Higher Hotel Rates

Price changes for business travel in North America are expected to be a mixed bag with most airline tickets costs taking a slight dip and hotel room and car rental rates in most business destinations increasing slightly.

That’s the conclusion of the , which says most of the changes to the cost of business travel will be motivated less by global economic trends than by location-specific business conditions.

For instance, the forecast suggests that those slightly lower airfares will be the short-term result of increased competition among low-cost carriers. Meanwhile, the lack of new hotel construction in some major business destinations will mean higher hotel rates.

American Express’s business travel forecast indicates short-haul economy class airline ticket prices will remain relatively flat while long-haul economy class tickets could fall as much as 4 percent. At the same time, short-haul business class airfares are likely to fall between 8 and 13 percent below 2013 levels while long-haul business class fares will increase 3 to 6 percent.

The competition among low-cost carriers, as well as corporate travel policies putting more restrictions on business class travel, will dictate some of those changes. The forecast does suggest that impending consolidation—for instance, the merger of U.S. Airways and American Airlines—could eventually offset any declines.

Increases in hotel room rates will vary widely from city to city. Large business destinations like New York and Chicago will continue to see increases while small destinations with more hotel oversaturation will remain flat or decline.

In general, North American room rates are expected to increase between 2 and 5 percent in 2014.

Finally, car rental rates will slightly increase, 1 to 1.5 percent, across the board. This is primarily because of increased car prices, which the forecasters anticipate car rental companies will pass on to customers.

To stay updated on the latestEXPO news, become a Facebook fan, follow us on Twitter or sign up for our newsletter!

Posted by Michael Hart

Michael Hart is the executive editor of Expo. Reach him at mhart@accessintel.com.... View all articles by Michael Hart →