Unbundling to add 15% to trip cost
Business class airfares are set to rise in 2010, the global business travel forecast by American Express said.
The survey said it expected slight price increases in most travel categories including a modest rise in European hotel rates.
Amex also warned that because of the rise in ancillary charges, business travellers should expect to add a further 15% to the total cost of a trip.
It based its price rise forecast on "pent up trip demand" coupled with changes in supply.
The survey, compiled by Amex's newly formed research team eXpert Insights, the business class air fare rise came from "expected to increase in line with reduced capacity and on-going business demand for international travel."
In its Business Travel Monitor Europe, released last month, Amex said that some business and economy class fares had dropped in the past year by more than 19%.
Hervé Sedky, Amex Business Travel's vp and general manager, said: "As the world begins to show signs of emerging from the recession, businesses are adapting to a fundamental shift in thinking focused on proving the value of travel and every employee connection.
"Heading into 2010, companies will need to consider the impact of these changes in mindset, particularly as projected rate increases in key travel categories gain momentum."
Globally Amex predicted that short haul economy airfares would rise by up to 5% in 2010 while long haul business class fares would increase by 1%-6%.
It forecast that rates in mid-range hotels would vary from a 3% drop to a 2% increase while the upmarket rates would range form a 4% fall to ago 1% increase.
For Europe, Amex predicted that short haul economy fares would either stay the same or go up by 2% but long haul business fares would increase by 5% to 7%.
For hotels, Amex said mid-market properties would see rates varying from a drop of 2% to a rise of 2.5% while up-market hotels rate changes would range for a fall of 2.5% to an increase of 2%.
In North America, Amex said domestic economy fares would go up between 2% to 7% while long haul business class would rise by 1% to 6%.
But the travel management company predicted another poor year for American hotels with mid-market rates dropping by from 4% to 1% with up-market properties seeing a decline of between 3% and 6%.
Mr Sedky said: "Considering airfare, hotel, and ground transportation, we expect the average domestic trip to increase 1.2%or $13, to a total of approximately $1,080.
"An increase of 2.4% or approximately $67 is expected for international trips to bring the average cost to $2,818.
"However, as unbundled and ancillary fees continue to add to the cost of trips, businesses should expect to add up to an estimated 15% to the total trip cost for air, hotel, and ground transport elements alone."
On trends in Europe, Amex said: "As companies looked for ways to curb travel costs, many companies in Europe traded down from traditional airlines to low cost carriers in 2009.
"Overall airlines in Europe saw declines in volume and while demand is expected to grow in 2010, fares are expected to decline in the first half of the year as airlines compete for market-share.
"While hotel rate changes will likely vary by country, overall, it is expected that rates will only increase modestly at best in Europe in 2010.
"Opposite the trend in the US to unbundle services however, European hotels are giving travellers additional amenities as a means to attract their business and loyalty and retain price levels."
Country by country in Europe, Amex said long haul business class fares could rise by up to 9% in Sweden, 8% in Germany, 7% in the UK and 6% in France.
Economy fares on short haul in Europe could rise by up to3% in Sweden and by 2% in the other three countries.
Mid-range hotel rates could vary from a drop of 3% in the UK to rises of 3% to 4% in all four countries while upmarket rates could again range for a 4% fall in the UK to 2% to £5 increase in the four countries.
Amex said that car renal rates would in all four countries range from a 4% fall to staying where they are now.
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