American Express Business Travel’s 2007 analysis of domestic and international air, hotel and car rental rates revealed that car rental prices rose 4.4 percent from 2006 to 2007. The Business Travel Monitor, the travel industry’s pricing benchmark, also showed that domestic airfare and hotel rates remained stable, while international rates experienced price increases.
The increase in average daily cost for domestic car rentals occurred as car rental companies attempted to offset high operating costs. Fleet costs, which increased 20 percent in 2006, grew at a slower pace in 2007 due to the weakening economy and the ability of RACs to negotiate better deals with auto manufacturers.
The average daily cost for car rentals, drawn from American Express Corporate Card data, represents all charges, including mileage, gas, tax and insurance. As car rental prices continue to rise, RACs can expect corporate buyers to seek new ways to manage their spending in this area.
Average daily car rental rates:
2001 - $63
2002 - $64
2003 - $65
2004 - $65
2005 - $66
2006 - $69
2007 - $72
(Source: American Express Business Travel Monitor, 2007.)
Rising fuel costs and a strong travel demand caused international airfare prices to increase 8 percent in 2007. Airfares to Asia, Australia, Central America, South America and Europe all experienced double-digit growth, according to the Business Travel Monitor data.
Average international airfare paid:
2001 - $1,461
2002 - $1,473
2003 - $1,469
2004 - $1,514
2005 - $1,614
2006 - $1,707
2007 - $1,836
(Source: American Express Business Travel Monitor, 2007.)
The average domestic airfare stabilized in 2007 as travelers booked flights early to take advantage of lower fares. A slowdown in network airlines’ capacity growth also contributed to the stabilization. The steady prices came as some relief to travelers, who experienced a 7 percent price increase from 2005 to 2006.
Average domestic airfare paid:
2001 - $259
2002 - $243
2003 - $243
2004 - $225
2005 - $216
2006 - $231
2007 - $230
(Source: American Express Business Travel Monitor, 2007.)
International hotel rates rose while domestic hotel rates remained high but stable. Growing international economies caused both business and leisure travel to increase, which in turn increased the demand for hotel rooms. Domestic hotel rates remained relatively steady throughout each quarter of 2007, though a limited supply of rooms, high demand, and increasing renovation and operating costs kept rates at record highs. The deluxe hotel segment experienced double-digit increases while economy and budget tier rates flattened out.
Average international booked hotel rates:
2000 - $190
2001 - $192
2002 - $188
2003 - $195
2004 - $197
2005 - $212
2006 - $230
2007 - $266
(Source: American Express Business Travel Monitor, 2007.)
Average domestic booked hotel rates:
2000 - $131
2001 - $133
2002 - $129
2003 - $127
2004 - $132
2005 - $137
2006 - $141
2007 - $157
(Source: American Express Business Travel Monitor, 2007.)
