American Express Business Travel has published its annual Global Business Travel Forecast and Trends report, which predicts supply, demand and strategy for the business travel industry. The report, which was supposed to be published in September, was delayed and adjusted to account for this fall's global economic crisis. It predicts an increase in the total cost of business travel and in operating challenges for both travel buyers and suppliers.
"In this difficult economic environment, successful T&E management strategies will be based upon the total cost of a business trip, which takes into consideration costs such as parking fees, airline fees, meals and other related expenses," said Herve Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel.
According to Sedky, who cites airfare, car rental and hotel costs, American Express expects the average domestic trip to increase by 2.8 percent, or $31, to a total of approximately $1,139. Meanwhile, it expects an increase of 4.3 percent, or approximately $147, for international trips, to a total cost of $3,556. "If you include the costs of additional travel expenses," he continued, "including baggage fees, dining, airport parking and even package shipping, it can add an estimated $400 to the total trip cost."
Although it projects an increase in the total cost of travel, American Express predicts in certain markets a decline in airfares. "Based on forecasted economic conditions for 2009 and the substantial increase in fares already experienced in 2008, it is possible that airfares in 2009 may decrease," Sedky said. "However, this doesn't necessarily correlate to a decrease in prices paid as airlines continue their pursuit of expanding the suite of fees charged for services such as in-flight meals and baggage."
Hotel rates, meanwhile, are expected to climb modestly—below growth levels experienced this year—and will be kept in check, American Express predicts, by falling demand and occupancy, which should give travelers extra bargaining power in some markets.
Finally, American Express predicts a tightening market for meeting planners. "As economic conditions continue to draw attention to meetings as a source for savings," reads a company statement, "senior business leaders are expected to seek further visibility into meetings spending and aim to measure the return on investment of meetings and events for their companies."
Given their increased focus on cost, American Express says companies will likely embrace shorter events in more local destinations, as well as money-saving technology.
For more insights and projections from the Global Business Travel Forecast and Trends report, view American Express' complete press release