Strong price increases in the world business travel industry are on the way according to American Express's 2006 Global Business Travel Forecast.
“Although the pace varies significantly by region and country, published air and hotel prices worldwide are expected to rise considerably next year as business travel demand recovers in step with the global economy,” the study said.
Areas where strong demand is expected to push up prices include Europe, North America and the Japan, Asia-Pacific, Australia market.
With “significant traffic” in the transatlantic markets, travellers can also expect higher business class fares on this route.
Matthew Davis, Amex's director consulting global business partnerships, said that while fuel was a drive in increased air fare, American Express believed it would stabilise at $50-60 a barrel next year.
The forecast predicts that, overall, short haul economy fares will rise by 3%-6% globally while in Europe the increase will be up to 4%.
On international long haul, the rise is expected to be globally 3%5-5% and in Europe 4%-6%.
Globally and in Europe, mid-range hotel fares are set to rise by 1%-3% while upper-range hotels rates are likely to go up by 3%-5% globally and by 2%-4% in Europe.
On a country basis in Europe, short haul economy fares are likely to rise by 2%-5% in France and by 3%-5% in the UK.
In Germany, because of the increasing competition, some short haul fares could drop by 3% while on other routes they could rise by 3%. In Sweden, there is likely to be an overall rise of 3%.
Long haul fares in France, Germany, Sweden and the UK are likely to rise, respectively, by 3%-6%, 3%-5%, 2%-4% and 5%-7%.
Mid-range hotel rates are likely to rise in the France, Germany, Sweden and the UK by, respectively, up to 3%, 2%, 3% and 4%.
The rise for upper-range hotels in France, Germany, Sweden and the UK is, again respectively likely to be up to 4%, 2%, 4% and 5%.
Mr Davis said demand for short haul travel in Europe is likely to be encouraged by new business opportunities in countries like Estonia, Latvia and Poland.
But attempts to raise fares are likely to be “dampened by the still burgeoning competition form low cost carriers depressing short haul yields.”
He said that demand was likely to drive up occupancy in European hotels but warned there could be significant price increases. Corporates could see rate increases in some cities, like London, of 10%-15%