Meetings and events — including internal meetings, incentive trips and international meetings — will continue to make a steady recovery in 2012, although they'll do so amid rising costs, according to Carlson Wagonlit Travel (CWT), which last week released the results of its 2012 Global Travel Forecast.
In 2012, CWT said, the United States will continue to struggle with high unemployment rates and ongoing effects of the housing crisis that originated during the economic downturn. It predicts a 3.5 to 4.1 percent increase in airline pricing due to "suppliers' disciplined efforts to manage capacity even in the face of demand, ultimately resulting in fuller planes and rising prices overall." Meanwhile, CWT forecasts a modest increase in average daily hotel rates in the United States — a 2.4 to 3.1 percent increase in the first half of 2012 and a 2.6 to 3.4 percent increase during the second half of the year — and a 1 to 2.5 percent decrease in car rental rates due to "intense competition for the business traveler, which forces suppliers to reduce or keep prices flat to retain corporate clients."
Among the report's other key findings:
• Average group sizes are expected to grow 1 to 4 percent in North America for all meeting types compared to 2011 levels.
• Cost per attendee per day will increase by 5.5 to 6.5 percent as a result of strong demand and limited supply in travel related to air and hotel, though market-specific increases will range as broadly as 2 to 9 percent given varying demand and pricing in local geographies.
• Property availability will become an increasing concern for meeting buyers and planners as hotels will be less willing to provide flexibility on contractual terms due to increased occupancy levels.
• Organizations are expected to maintain an increased focus on enterprise-wide meetings management.
"Travel buyers in most parts of the world are facing tough negotiations as the landscape increases in complexity," said Nick Vournakis, vice president, CWT Solutions Group. "At the same time, economic uncertainty continues in some parts of the world and has resurfaced in others, prompting increasing questions on exactly what 2012 holds in store for organizations and, by extension, for business travel. CWT will keep a close eye on the evolving situation with supplier pricing, and will advise our clients accordingly on how to navigate the challenges and opportunities they're presented with as 2011 concludes and 2012 begins."