Domestic business travel airfares rose 10 percent in the first quarter of 2011 over the same period last year, surpassing their pre-recession average in Q1 2008, according to the latest Business Travel Monitor report from American Express Business Travel.
The report also said that domestic hotel rates rose by 3 percent in Q1 2011 versus Q1 2010, with San Francisco leading the pack with a rate increase of 16 percent. Seattle posted a rate gain of 9 percent, while Austin, Texas; Omaha, Neb., and New York City came in at 8 percent.
“Airfare increases have been expected given the rise in the cost of oil and the return in demand in business travel,” said Christa Degnan Manning, director, eXpert insights research, American Express Global Business Travel. “On top of this, airlines are continuing to form alliances and joint ventures. As prices continue to increase and capacity levels remain tight, companies need to ensure they are following the market, reviewing travel spend and ensuring they are using suppliers and implementing policies that facilitate optimal cost savings opportunities.”
She added that the moderate increases seen in average room rates are in line with American Express Global Business Travel’s forecast expectations as demand in travel increases.
“With the moderate rate increases we’re seeing this year that are due to increase in demand, companies need to be vigilant in ensuring travelers receive their corporate negotiated rate. Hoteliers are likely to try to continue increasing rates particularly, as we head into the negotiating season. However, companies that keep a close eye on market conditions and benchmarking actual rates paid in key travel destinations will be better positioned to maintain their discounts,” said Manning.
Manning concluded: “One way to combat rate increases in 2012 would be to lump group travel volumes with transient commitments thus leveraging total travel activity to maximize savings. Meetings are certainly part of the demand equation and will play a contributing factor in specific market rate changes next year.”
