The American Express annual "Global Business Travel Forecast," released yesterday, reports that demand for business travel services will again outweigh supply in 2008, driving continued increases in rates across air, hotel, car rental, and corporate meetings and events.
While worldwide airfares are expected to continue their climb, hotel rates are projected to experience high double-digit increases in demand-heavy markets across the U.S., Europe and Asia, AmEx says.
“Travel managers and procurement professionals can expect another capacity-restricted, challenging year and a continued push to keep travel and entertainment budgets in check," says Mike Streit, vice president and global leader for American Express Business Travel Advisory Services.
HOTEL SEGMENT HOT
The report predicts that hoteliers around the world will continue to benefit from their market position in 2008.
High demand and slow growth of supply is likely to force prices up and will impact access hoteliers give to last room availability rates, the report says. Continued infusion of capital to hotels should benefit travelers through renovations and upgrades of properties and additional amenities, particularly in lower market tiers. However, these improvements will force hotels to maintain rates at historic highs, the report says.
Rising hotel rates are likely to contribute to the expected increase of 8 percent to 10 percent in global meeting spend; guestrooms account for nearly half of all meeting spend, excluding airfare, the report says.
Companies are expected to increase the focus on responsible business travel practices related to the environment and the safety and security of travelers. Companies are expected to increasingly focus on understanding and measuring a trip’s “carbon footprint.” Although carbon offsetting remains popular, "We think that this is likely to prove to be a short-term solution that will be combined with policy and program management strategies," the report says.