Amex: Air Fares Down Last Year, Hotel Rates Up

New York -- Average domestic air fares continued their downward trend last year while domestic hotel rates continued to climb, American Express reported yesterday.

Average air fares fell to $216 in 2005, continuing a downward trend that began in 2001, according to the American Express Business Travel Monitor. The report, which is issued quarterly, attributed the decrease to competition from low-fare carriers and simplified fare structures introduced last year.

Despite the overall price drop, the average air fare rose each consecutive quarter throughout the year, indicating that travelers will pay more for airline tickets this year, according to the report.

Meanwhile, average daily rates at domestic hotels reached $137 last year--the highest since 2001--driven by increased travel combined with little new supply, according to the report.

Average rental car rates also climbed last year, to $66, up one dollar from the year before.

"For 2006, the pricing trend lines indicate that corporate travel buyers will face a tough negotiating environment across the board," said Andy McGraw, senior vice president and general manager of American Express Business Travel North America.

Internationally, the average air fare jumped 7 percent in 2005 over the year before, to $1,666, based on 160 international city pairs, according to the report.

International average daily rates for hotel rooms rose to $212, a 7.5-percent increase over the previous year.