Research and White Papers
AmEx Predicts 2011 Meetings Growth
October 21, 2010
In 2011, companies will likely increase their spending on and frequency of meetings, predicts American Express Business Travel, which yesterday released the results of its annual Global Business Travel Forecast.
According to the forecast, companies will hold more meetings next year, and will spend more on them overall. At the same time, however, they likely will spend less per meeting as meeting size decreases and sourcing efficiencies increase.
Finally, AmEx predicts, planners will likely hold more local and regional meetings, and incorporate more virtual alternatives and supplements to face-to-face gatherings.
Meanwhile, AmEx also has released projections for business travel prices, including airfare and hotel rates, which it expects to rise 10 percent next year in key global markets. Specifically, it forecasts, domestic economy-class airfares — already up 21 percent in 2010 — will rise 2 percent to 6 percent while hotel rates will rise 1 percent to 6 percent.
"Throughout 2010, companies have lifted travel restrictions brought on by red bottom line fears and this is expected to continue into 2011 as firms look more toward growing the top line," said Christa Degnan Manning, director of eXpert insights and research, American Express Business Travel. "Yet pricing power will swing back to air and hotel suppliers for the first time in two years in 2011 as more competition for limited seats on planes and increased occupancy levels at hotels are expected. As a result, companies should re-examine program strategies and policies undertaken in the past few years and look to manage budgets and cost-control tactics competitively to protect them from the significant rate increases expected."
Thanks to increased demand and constrained capacity, airfare and hotel rates are expected to reach pre-recession levels next year, according to AmEx, which suggests that companies contain their corporate travel costs by benchmarking their travel expenditures to peer companies, encouraging more and earlier advanced bookings, booking hotel and airfare together to take advantage of packaged savings, and being more vigilant when it comes to black-out dates and restrictions.
"Even with the expected increases in rates, businesses can preserve travel budgets and efficiencies by staying knowledgeable about industry pricing trends, planning appropriately and supporting travelers to make the best decisions of how to spend those dollars," Manning continued. "For example, average daily rates of hotels are expected to rise above 10 percent in many locations in 2011; however, corporate negotiated rates will be lower as hoteliers compete for corporate loyalty business and lock in volume business commitments. Companies will likely forfeit a lot of savings when employees book outside preferred agreements and channels and end up paying consumer rates in 2011."
For more information, including complete forecast data, visit
www.businesstravelconnexion.com.