According to the American Express Global Business Travel Forecast released today, pent up trip demand coupled with supply base changes are likely to cause rates to slightly increase in most travel categories by the end of 2010. Business class airfares in particular are expected to increase in line with reduced capacity and on-going business demand for international travel. The Forecast was produced by eXpert insights, the newly created research practice of American Express Business Travel’s Global Advisory Services.
Global Business Travel Forecast
A prolonged period of weak demand in the travel industry depressed prices across travel categories in 2009, most notably in hotel, which as an industry can not reduce capacity as well as airlines and car rental companies. Following this weakened demand in 2009, American Express Business Travel expects a pent up need for travel and meetings to be unleashed in 2010. Fuel prices, along with sustained signs of a restarting economy, could also generate slight up-ticks in travel category prices worldwide, particularly in Asia Pacific.
North America – Air/Hotel/Car Forecast and Trends
Overall, business travel growth is predicted to be up one percent for the U.S. and 15 percent for Canada in 2010. Route and capacity reductions made in the region in an effort to equalize the decrease in demand in 2009 are expected to force prices up in North America in 2010, higher than most other regions.
Hotel rates are expected to remain on the decline in North America as a whole as hoteliers fight to attract both business and consumer travelers back. Car rental rates will likely increase slightly (-1 percent to 2 percent) as the cost of vehicles is expected to rise following decreases in capacity in 2009 and car manufacturing consolidation driving up the cost of replacing relatively old fleets.