AMEX warns travel buyers face challenging
year
Laptop Battery AMEX Business Travels 2006 Global Business Travel Forecast
indicates strong price increases in the global business travel
industry and suggests a more challenging corporate travel buying
market in the year ahead.
- The PATA (Pacific Asia Travel Association) CEO Challenge in Bangkok grapples with how the travel business will face the problems of travel and climate change
Thinkpad Published air and hotel prices worldwide are expected to rise
considerably next year as business travel demand recovers in step
with the global economy, outpacing the growth of supply in many
markets.
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Microsoft Regions of strong business travel demand include Europe, North
America and Japan, Asia-Pacific and Australia (JAPA), with
significant traffic in the trans-Pacific and trans-Atlantic
markets. Rates will increase as suppliers feel intense pressure to
recover losses, soften the effect of skyrocketing fuel costs, and
in some cases even grow profits.
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Laptop Computers While pricing pressure remains across the airline industry,
continuing competition from low-cost carriers may limit airlines
ability to raise fares in many markets.
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Laptop Computer AMEX Business Travel forecasts domestic/short-haul, economy
class fares will rise by three to six percent and
international/long-haul business fares increasing by three to five
percent in 2006. On the hotel side, room rates overall for
mid-range properties will increase by one to three percent, while
upper-range properties will increase by three to five percent.
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Desktop Computer Corporate clients are traveling more, and increased
globalization is leading to strong demand for long-haul air travel
and hotel space at their travelers destination. Whilst global fares
are rising across the board there are significant variations by
region and even the countries within those regions, commented
Matthew Davis, Director of Global Consulting at American
Express.
Notebooks Global Airline Highlights
Low-cost carriers will continue to impact the airline industry in
2006. For example, in North America, typical business fares are
expected to rise between five and eight percent for the year,
propelled by economic recovery, increases in business and leisure
travel and supplier pressure to recoup
financial loss. Airlines will
continue to deal with acute pricing pressure from rising fuel
costs, while simultaneously trying to stay competitive with
low-cost carriers.
Lenovo Many traditional airlines have adopted the low-cost carrier
business model; however, with the ever-increasing price of oil,
many airlines could be forced to increase fares, said Davis.
Hard Drive In Europe, significant new business opportunities in countries
like Estonia, Latvia and Poland will remain key drivers behind
increasing air travel in the region. Attempts by the airlines to
significantly increase fares in response to increased passenger
traffic and rising oil prices, however, are likely to be dampened
by the still burgeoning competition from low-cost carriers,
depressing short-haul yields. Additionally, a bilateral treaty
between the United Kingdom and India could triple direct scheduled
services, recognizing the importance of business and leisure
opportunities between these two countries.
Travelstar Within JAPA, the impact of deregulation has fostered a growing
number of low-cost carriers operating in the region, allowing the
carriers to expand their networks and coordinate schedules across
country lines.
Gateway In Latin America prices will likely begin to climb; however,
North American and
European carriers are expanding
their service within the region, thereby increasing competition
and decreasing the overall number of routes with single carrier
operations.
Laptop Parts Global Hotel Highlights
On the hotel front, the corporate negotiations environment will be
more challenging this year than in recent years.
Software Yesterdays good rate may well be unobtainable tomorrowleading to
unpredictable hotel costs and, occasionally, an inability to obtain
a suitable room. Unless a company locks in a negotiated rate with
last room availability, prices will likely rise in proportion to
occupancy levels in a given city, stated Davis.
Hard Drives In North America and Europe, corporate hotel rates are expected
to rise in 2006, driven by rising occupancy rates as a result of
increased demand with limited supply growth. The situation is
similar in Europe, where average client-contracted hotel rates are
expected to increase by one to four percent next year. However,
rate increases in certain cities may exceed this range in London,
for example, some companies may face increases of 10 to 15 percent.
The shift to dynamic pricing means that rates will reflect the
peaks and valleys in demand by market.
Electronics In the JAPA region, growing business demand means hotel
occupancy rates could grow considerably, particularly in India and
China. That said, significant threats to demand lie in the
possibility of an avian bird flu outbreak and tempering of demand
via rising oil prices.
Canon The Latin American region will likely experience an increase in
capacity, especially among international and upper-range hotel
chains.
Desktop Pc Based on the initial proposed hotel rates for our clients, it
will be even more important for corporations to seek expert advice
in travel planning, as expertise in this arena may pay back big
dividends, Davis continued. Without a well-maintained hotel program
in place, companies can expect to pay significantly more for
walk-up rates. It is clear that the outlook for 2006 will challenge
the most experienced procurement managers.
Desktop Computers United States and Canada Airfare/Hotel/Car Trends and
Forecasts
In the United States, short-haul economy fares are expected to
rise by five to eight percent and international business class
fares should rise by two to six percent. Increases in
trans-Atlantic demand and an improved global business environment
could push higher airline prices internationally. Furthering this
trend is low-cost competition, particularly in key airport markets
and experimentation with simpler fare structures may expand the
impact of low-cost competition to other hub markets.
Think Pad Watchers of the Canadian market can expect economy class fares
to rise five to eight percent given the demise of jetsGo in 2005.
Canadian international fares will also closely reflect the United
States pricing, growing two to five percent. Since the demise of
jetsGo, Canada is primarily a two airline country and will see more
rational pricing in 2006.
Repair Standard corporate rates for mid-range hotels are expected to
increase by zero to three percent in the United States in 2006,
while upper-range rates are forecasted to rise by two to five
percent. The industry has been experiencing this upward trend for
the last 18 months. Overall impact of pricing increases on
corporate travel budgets may be moderate if demand slows.
Data Recovery Within the car rental space, improved corporate demand and
higher supplier costs are expected to place upward pressure on car
rental rates. American Express Business Travel expects car rental
rates to increase by seven to eight percent in 2006.
Cisco Overall, increases in economy fares for domestic/short-haul
travel are expected to range from zero percent to five percent.
Business class fares on long-haul/intercontinental routes will
increase by approximately four to six percent.
Keyboard Pricing trends will continue to be volatile and vary
significantly by country market. Low-cost competitors continue to
attract business traffic and depress short-haul yields, and
continue to drive down pricing on specific domestic/short-haul and
regional routes. With low-cost carrier penetration in Europe still
averaging 24 percent, there is tremendous opportunity for these
carriers to continue to divert market share from the traditional
carriers.
Monitor Hotel pricing is expected to increase from one to three percent
in mid-range and two to four percent in upper-range hotels across
Europe next year, barring significant political or economic
disturbances. Key drivers of pricing pressure include a rebound of
inbound, international travel, improved occupancy rates, hotel
industry consolidation and a shift toward a more dynamic pricing
model.
Desktop Overall, the improving economic conditions continue to spur
increased capacity, both domestically and internationally in the
LA&C region. Generally, economy class domestic/short-haul fares
will rise from two to five percent, and business class
international/long-haul fares will rise by four to seven percent.
Additionally, the market is gradually becoming more competitive,
although most routes still lack multiple carriers.
Infosys On the hotel front, published rates in most of the key business
markets are expected to rise significantly during 2006. Increased
local and international travel to LA&C is expected to exert
upward pressure on hotel pricing.
Refurbished Laptops American Express is predicting a two to three percent increase
in domestic/short-haul fares within key countries of the JAPA
region in 2006. On international/long-haul routes, product upgrades
and service improvements could lead to a three to four percent
increase. The proliferation of regional, low-cost carriers
operating short-haul routes within Asia is expected to soften the
upward pressure on pricing.
Wipro On the hotel side, American Express Business Travel forecasts a
four to five percent increase in mid-range hotel rates across the
JAPA region, and an eight to nine percent increase in upper-range
hotel rates. The dynamic growth rates air and hotel will continue
to have a predictable effect on hotels, especially in markets like
Bangalore, Hyderabad, Mumbai, Shanghai and Beijing.
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