The economic recovery in the US means business travel is now a suppliers’, rather than a buyers’ market, according to American Express.
Data from American Express’s Business Travel Monitor North America reveals a year on year 8% rise in international airfares in the third quarter, prompting the travel management company to conclude that negotiating power is changing hands from buyer to supplier.
“During the past quarter we’ve witnessed a distinct shift from a buyers’ market to a suppliers’ market leading to higher prices across several travel categories including airfare and hotel rates,” said Christa Degnan Manning, eXpert insights research director for Amex’s Global Advisory Services.
The survey found average international fares of $1,781, compared with $1,638 in Q3 2009. However, the latest figure is far short of the same period in 2008, when pre-recession rates reached $2,010. Average domestic fares in the latest quarter reached $228, up 6% on last year’s $215 but still short of 2008’s $253.
The survey revealed a smaller recovery in the hotel sector. New York leads the way with a 10% increase year on year to an average $348 and other cities averaging 4-5%. Taken as whole, average domestic US rates were $148, up 3%. International rates fell $1 year on year to $238.
“As business travellers headed back on the road, hoteliers have been able to make marginal increases this year,” said Manning. She warned that construction projects that had been put on hold during the recession might mean bigger increases next year as capacity tightens in some locations.
“Global Advisory Services has already seen an average increase of more than 7% in corporate rates worldwide this year for 2011 business travellers, she said.