On April 29, American Express Business Travel released data and analysis of its North American-based domestic and international air, hotel, and car rental prices paid for the full 2008 year and first quarter of 2009, as economic conditions heavily impacted a change in average prices paid for business travel.
Data from the company’s Business Travel Monitor (BTM), the industry’s pricing benchmark, revealed that international and domestic airfare prices ended 2008 up year-over-year and hotel rates down slightly. Looking at Q1 2009 data, signs point to the effect of a weakening economy, belt tightening by corporations, and falling consumer demand noticeably impacting travel rates across the board.
- Average domestic and international airfares paid increased 7 percent and 6 percent respectively in 2008 as a whole, but began to slide in Q4 2008,continuing into Q1 2009.
- Q1 2009 domestic average airfares paid are down 9 percent compared to the first quarter last year.
- Q1 2009 international average airfares paid are down 12 percent versus Q1 2008.
- Average international and domestic booked hotel rates both showed year-over-year decreases of 12 percent in the first quarter 2009.
- International business class air travel fell from an average of 50 percent of all bookings in 2008 to 39 percent in Q1 2009.
- Economy class international air travel surged 13 percentage points to 56 percent of all travel in Q1 09 versus a steady 43 percent throughout 2008.
Car Rental Rates Post Modest Increase in 2008 but Ease in Early 2009
In 2008, the overall cost of car rental increased slightly as demand increased and buyers saw the impact of fuel costs over the course of the year. Taxes and local fees on car rental transactions also continued their steady increase. However, slightly weaker demand in the first quarter of the year has stabilized costs so far this year. There was also increased interest in intermediate and hybrid cars versus larger cars for overall cost control and fuel savings. This reflects adherence to new policies surrounding ground transportation and eco policies. Advisory Services is predicting the overall daily cost of car rental will remain flat for 2009.
Average daily cost of car rental:
2003 - $65
2004 - $65
2005 - $66
2006 - $69
2007 - $72
2008 - $74
Q1 ’09 - $73