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AMEX Releases Global 2015 Business Travel Predictions


The American Express Global Business Travel Forecast 2015 predicts that Canada will benefit from an improving US economy but that air and hotel prices will increase as more power is put into supplier hands.

“Canada’s economy is expected to remain stable or grow in 2015, increasing business travel across the country and abroad. The reality of supply and demand along with a focus on yield management will benefit Canada’s air and hotel suppliers who will likely increase pricing. This will place even greater emphasis on companies and travel managers to find ways of evolving their travel programs to improve the returns on their travel expenditures,” says Colin Temple, vice-president and general manager at American Express Global Business Travel, Canada.

The Forecast is a key deliverable of Global Business Consulting from American Express Global Business Travel as part of its EXPERT INSIGHTS research practice. It is based on a number of primary data sources, including proprietary data from the Global Business Travel Monitor, the American Express Global Business Travel contracted rates database, aggregate transaction data, and secondary data sources including Smith Travel Research (STR) Global Hotel Reviews, Center for Asia Pacific Aviation (CAPA), Airline Weekly and economic data projects from Economywatch.com.

The Forecast predicts the following increases in the North America airfare, hotel and car rental categories:

  • 2% to 6% increase in short haul business class fares
  • 1% to 4% increase in long haul business class fares
  • 2% to 5% increase in short haul economy fares
  • 1% to 3% increase in long haul economy fares
  • 3% to 6% increase in mid-range hotel room rates
  • 3.5% to 7% increase in upper-range hotel rates
  • 0.5% to 1% increase in car rental base rates

In Europe, the Forecast predicts that air prices will “likely remain neutral, with the exception of added capacity on transatlantic routes, which may lead to depressed fares.” Its also expected that corporations will impose stricter travel policies resulting in a slight decline in short-haul business travel.

  • -5% to -2% decline in short haul business class fares
  • -1% to 1% change in long haul business class fares
  • 0% to 2% change in short haul economy fares
  • -1% to 2% change in long haul economy fares
  • -0.9% to 0.6% change in car rental base rates
In Europe, the Middle East and Africa (EMEA) hotel rates are predicted to rise slightly in nearly all countries and categories. In 2015, a larger number of cities are expected to add higher hotel-related taxes for travelers, making it more difficult for companies to accurately determine hotel pricing in advance.
  • 1% to 6% increase in mid-range hotel room rates
  • 0% to 5% increase in upper-range hotel room rates

Outside of Europe, capacity increases will likely cause prices to drop for short-haul business and long-haul economy fares in the Middle East and Africa.

Some increases are also expected in the Latin America market, which is experiencing conservative overall economic growth.

  • -1%  to 3%  change in short haul business class fares
  • 2% to 5% in long haul business class fares
  • -1% to 3% change in short haul economy fares
  • -2% to 3% change in long haul economy fares
  • 5% to 8% increase mid-range hotel room rates
  • 5% to 7% increase in upper-range hotel room rates
  • 1.8% to 2.1% increase in car rental base rates

In the Asia Pacific region individual country predictions tend to be positive, though there is variability throughout the region. However, overall economic growth is expected to be slower than in previous years. Airfare and hotel changes are predicted at the following rates:

  • 0% to 2% change in domestic business class fares
  • -1% to 2% change in international business class fares
  • 1% to 2% increase in Intra-APAC business class fares
  • 0% to 3% increase in domestic economy fares
  • -1% to 1% change in international economy fares
  • 0% to 2% increase in Intra-APAC economy fares
  • 0.8% to 3.5% increase in mid-range hotel room rates
  • 0.7% to 3.5% increase in upper-range hotel room rates

 



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