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AMEX Predicts Moderate Business Travel Increases

Air, hotel and ground transportation prices will increase moderately in 2016 as a result of a slowly improving global economy, lower gas prices and stronger demand, according to the just-released American Express Global Business Travel Forecast.

“While we expect modest increases in global travel prices heading into 2016, travel managers are operating in an era of new challenges and evolving disruptors,” said Caroline Strachan, vice-president, Consulting, American Express Global Business Travel. “In addition to handling tasks such as measurement and compliance, new factors such as the sharing economy and mobile booking channels are becoming increasingly popular for business travellers. In order to thrive in this digital era, travel managers need to be aware of and dynamically adapt to these forces across a variety of geographies.”

The annual forecast provides subscribers with more than 1,800 pricing predictions across airfares, hotel rates and car rental rates in the Americas; Europe, Middle East and Africa (EMEA); and Asia-Pacific (APAC), as well as related travel management program recommendations.

Key predictions in the forecast include:

♦  CANADA/AIR – increase in Canadian air competition means domestic prices are expected to come down between three per cent to six per cent in 2016

CANADA/HOTELS – overall hotel rates are not expected to increase more than 0.5 per cent next year with rates in some areas predicted to decline significantly.

US/AIR – outlook is mixed as economy continues to show steady growth and corporate demand increases. For short-haul flights, increased competition and growth among budget-carriers will help suppress price increases, while fares on long-haul flights are expected to remain relatively flat, particularly on routes to Asia and Latin America.

US/HOTELS – increased demand and higher group travel are expected to drive strong rate increases for North American hotels in 2016. The impact of a healthy pipeline of new construction and thus added inventory, is not expected to be felt until after 2016. However, in secondary markets, excess inventory will dampen price increases while competition for customers pushes hotel brands to focus on property renovations.

NORTH AMERICA/GROUND TRANSPORTATION – AMEX predicts limited growth in this market in 2016 with ride sharing and ancilliary charges continuing to be key themes. Ride-sharing services are expected to see greater mainstream adoption and expansion in 2016. However, North American car rental providers are becoming more aggressive with pricing for new commercial customers, while also looking to raise praise points slightly on rebids.



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