Two pieces of research, published separately, indicate the cost of travel will rise in 2011, with airlines keeping capacity tight to raise air fares, and hotels increasing rates as occupancy improves.
According to American Express’s (Amex) annual Global Business Travel Forecast, increases of up to 10% are expected in both air fares and hotel rates next year.
Christa Degnan Manning, director of eXpert, Amex’s global research practice which carried out the study, said: “Pricing power will swing back to air and hotel suppliers for the first time in two years in 2011 as more competition for limited seats on planes and increased occupancy levels at hotels are expected.”
The region with the highest predicted growth is Asia Pacific (up to 10% for long-haul flights), although other regions come in close.
In Europe and the middle east long-haul fares are expected to rise by between 5% and 9%, while for Latin America it is between 3% and 8%, and for North America between 3% and 7%.
The cost of short-haul flights in Europe is expected to rise by between 4% and 9%.
Hotel rates are also expected to head upwards, with Asia Pacific again thought to see the largest increase (up to 10% for both mid-range and upper-range hotels).
The 2011 Industry Forecast from BCD Travel is more cautious about how much air fares and hotel rates will rise, saying it expects “moderate” increases.
The research, by BCD’s consulting unit Advito, indicates that year-over-year increases in 2011 will not be as great as in 2010.
Bob Brindley, Advito’s VP, said: “Demand in 2011 will still be enough to bring travel volumes very close to their 2008 peak.
“Price increases, in turn, will in most cases bring costs per mile back to or a little below their peak in the first half of 2008.”
North America is likely to see air fares increase by between 2% and 7%, according to the study, while Latin American and Asia Pacific will see rises of between 4 and 5%.
Europe could continue to lag behind, or it may break through, with predicted rises in air fares of between 2% and 7%.
In the middle east fares are thought to see a rise of between 2% and 6%, and Africa between 2% and 5%.
Hotel rates will also see moderate increases, predicted Advito, with the greatest growth in room rates seen in emerging markets, led by Latin America (up 6%) and Asia Pacific (up 5%).
Europe is expected to lag behind, with an increase in rates of only 2.5%.
Both pieces of research suggest that corporate negotiated rates will become more important.
Brindley said: “Advito is recommending that buyers be even more vigilant in choosing supplier agreements carefully; promoting use of preferred airlines through policy and pre-trip controls; and redoubling communications to travellers to book flights early.”
Amex’s Manning said: “Even with the expected increases in rates, businesses can preserve travel budgets and efficiencies by staying knowledgeable about industry pricing trends, planning appropriately.”
He used the example of hotel costs: “Average daily rates are epected to rise... however, corporate negotiated rates will be lower as hoteliers compete for corporate loyalty business and to lock in volume business commitments.”
Manning added that businesses are likely to forfeit their savings if employees pay consumer rates by booking outside preferred agreements and channels.