American Express is painting a rosy price picture for air and rail travel suppliers, as well as the hotel sector, although cautions that travel managers will have to act nimbly on cost evaluation.
Unveiling its Global Forecast 2008 at the ACTE conference in Munich today, (23 October), American Express director advisory services, Prashantha Kuchibhotla, said that long-term demand for air travel looked certain to continue in most markets.
”We expect high demand to North America, the Far East, Dubai and South Asia, even though there is significant capacity,” he said, adding: ”However, in the UK, there is a downward [price] trend driven by low-cost carriers.
”In France there will be a long-haul increase. Paris Charles de Gaulle is pretty much dominated by one airline and the airport is slot controlled. Given low-cost carriers operating into France, there is also a lot of leisure stimulation.”
Kuchibhotla also highlighted last week's decision by Air France-KLM and Delta Air Lines to form a transatlantic joint venture from Heathrow, using some London-Paris slots from the French carrier - ”the wild card” as he termed it.
The Delta decision will add capacity from Heathrow and the US airline is the first of a group waiting to enter what is perceived as the gold standard of transatlantic business flights ” despite Heathrow”s catastrophically bad press.
”We are not predicting a huge change in rail fares in France and Germany, but in the UK with its regulated and unregulated tickets, train operators are spiking the latter as demand grows,” said Kuchibhotla.
Staying in the UK, Amex is predicting steep hotel price increases in what is already an extremely expensive market. While not quite attaining the stratospheric levels of the Russian scene as outlined at the ACTE conference by a Moscow-based TMC yesterday, London is nonetheless forecast to witness steep cost increases.
”Hotel prices will rise by between 19% and 22% and London will remain pretty strong,” noted Kuchibhotla.
American Express is also predicting that overall car rental rates will increase at a slower pace, while the cost of hotel meetings will rise by around 10%.
Benchmarking remains a key element of any travel policy says American Express, noting that travel managers should adopt a ”robust negotiating strategy.”