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American Express Predicts Slight Rise in Travel Costs in 2010

Pent-up demand coupled with supply base changes are likely to cause higher price tags for business travel in 2010, according to the latest American Express Global Business Travel forecast.

Weak demand kept prices low this year, most notably in hotel rates, the survey said. But rising fuel prices combined with sustained signs of economic recovery could generate "slight upticks" in travel category prices worldwide, particularly in Asia Pacific.

"Considering airfare, hotel and ground transportation, we expect the average domestic business trip to increase 1.2 percent—or $13 USD—to a total of approximately $1,080 USD," said Herve Sedky, American Express Business Travel vice president and general manager.

Overall, business travel growth is predicted to be up 1 percent for the U.S. and 15 percent for Canada in 2010. Hotel rates are predicted to remain on the decline in North America as a whole as hoteliers fight to attract both business and consumer travelers back. In Europe, hotel rates are predicted to increase only modestly in 2010. Opposite the trend in the U.S. to unbundle services, however, European hotels are giving travelers additional amenities as a means to attract their business and loyalty and to retain price levels, the survey said.

Hotel rates in Latin America will continue to decline, the survey said, but may increase from 1 percent to 6 percent in Asia Pacific, a region that has avoided the worst of the worldwide recession, the survey said.

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