The bare facts and figures of BCD Travel's 2008 Industry Forecast show that travel is at an all time high.
It's good news for suppliers who must be relishing the demand. But for buyers, it means not only higher prices but new challenges in finding flights and hotels in an industry operating almost at capacity.
Hotels seem to be the area where demand clearly exceeds supply. This has been the situation for three years, says BCD's consulting arm Advito which compiled the report.
While major chains are adding more capacity, the situation is not expected to begin improving until sometime next year. But Advito said that hotels are also becoming "so sophisticated in their management systems that …rate increases will still occur even if demand drops in some markets."
It means that buyers could be faced with the challenge of changing negotiating strategies. Advito points out that last year (2006), there was a "high number of hotels declining bid requests from corporations” and that volume was “often a negative factor."
Hotels are seeking higher rates from transient business and factors like Last Room Availability have decreased.
Advito expects this trend to continue, especially in key business markets where supply is too short to meet demand.
Hotels are using yield management and strong demand to push up rates and this high performance has led to growing speculation about mergers and acquisitions in the hotel industry where, analysts say, many companies are undervalued.
In this environment, Advito says that "traditional negotiation methods may no longer yield the same level of savings."
New strategies could include adopting "discount models using demand-based pricing" which has been traditionally resisted by buyers, the use bulk purchasing to secure room allocation, focus on "cost of stay" rather than cost of air fare, shift traveller patterns so the stay is on Sunday and Monday rather than mid-week, and encourage corporate meetings in "non-prime markets."
Air Travel also presents corporate buyers with a range of problems. Rising fuel costs, higher passenger numbers and controlled capacity will all combine to push fares higher - although the rise in corporate fares will be lower than that in leisure.
Advito also sees no end in sight to the chronic congestion at many airports with no new capacity due until 2009.
However the EU-US Open Skies agreement, due to come in next March, could bring more competition and lower business class fares out of Heathrow and more opportunities for airlines to codeshare.
But if low cost carriers which do not use the GDSs enter the long haul market, there could be more content fragmentation.
Advito says in air, buyers "will need to search harder to find savings opportunities" although they are there to be found.
These include increased carrier competition which is resulting in increased corporate discounts, more favourable fixed fares, the new all business class carriers which have increased pricing pressure on the high volume New York-London and New York-Paris routes and low cost carriers' continued expansion in regional markets.
Rail travel is likely to increase for business travellers as bookings through traditional GDS channels grow. Advito also predicts that this advance in booking technology will lead to more "interline agreements between rail and air carriers."
It predicts that rail fares will drop in 2009 when the Railteam project under which travellers can buy a single ticket valid for travel across seven European train networks comes into force.
Car rental companies are currently operating in a "challenging market" with costs rising. In response, major companies have streamlined their processes but Advito said it expected consumer prices to go on increasing as car companies "struggle to maintain profitability in the face of rising
operating costs."
Meetings planning also faces "supply and pricing challenges." There are signs that hotels are looking to group bookings to provide higher revenues in 2008 but there are also indications that meetings planners in both the US and Europe are avoiding European destinations because of a “poor” US-UK exchange rate and generally high prices.
But Advito says that Europe is also suffering from shortage of supply of both hotel accommodation and meetings space in popular destinations. This is on top of a lack of flight availability and congested airports.