Stricter Corporate Travel Policies Expected in 2007

New York -- Companies will likely subject their meetings programs to closer scrutiny next year as they tighten travel policies in response to rising transportation and lodging prices, American Express predicted today in its annual business travel forecast.

"We expect to see a growing number of corporations zero in on corporate meetings spending as this area, until now, has been under-examined and is ripe for savings and control opportunities," said Mike Streit, vice president of advisory services for American Express Business Travel.

The average domestic business trip in North America, including air transportation, car rental, and lodging, will increase 4.5 percent, or $46, next year over this year, according to the American Express forecast. The average international trip, including air and lodging, will increase 4.6 percent, or $180.

The seller's market in travel has prompted companies generally to tighten their travel policies as well as more strictly enforce those policies -- a trend that is expected to continue next year, according to Streit.

"We've seen a substantial shift in our clients' perception in how to be successful," Streit said during a press teleconference. "They're past looking to traditional procurement methodology; it's no longer just about leveraging costs.

"In a seller's market," Streit continued, "you have to look at everything. Companies must look at their own culture, from when and how they travel to where they travel. This is the primary topic with clients: how to approach their travel program more holistically."

Tighter corporate travel policies could cut the number of people that companies send not only to their own off-site meetings but also other corporate events, such as user conferences, as well as conventions and trade shows.

In addition, planners of external events may find it more difficult to fill their room blocks as attendees adhere to stricter corporate mandates to stay at their companies' preferred lodging suppliers.

In North America, published hotel room rates will rise three to eight percent at upscale hotels and two to six percent at mid-range hotels, according to the forecast, although rate rises could vary dramatically among destinations. For example, rooms rates in New York City could rise as much as 18 percent, the company said.

Published air fares in North America are predicted to increase three to six percent for coach-class domestic flights and two to six percent for business-class international flights.