Business Travel Airfares and Hotel Rates Increase in First Quarter 2012
American Express Global Business Travel today released first quarter figures on business travel pricing from its Business Travel Monitor showing the average prices business travelers are paying are higher. In light of this, companies should consider how they are proactively supporting employees in making the best travel purchasing decisions to help them stay within budget as they continue to hit the road.
Q1 2012 Business Travel Monitor Highlights
Prices across all categories of service for trips originating in North America to domestic and international destinations have increased compared to the first quarter of 2011 as companies continue to invest in travel and suppliers effectively manage capacity.
- Average domestic airfares increased six percent (6%) in Q1 2012 vs. Q1 2011 to $261
- Average international airfares increased four percent (4%) in Q1 2012 vs. Q1 2011 to $1933
- Average domestic hotel rates increased five percent (5%) in Q1 2012 vs. Q1 2011 to $157
- Average international hotel rates increased one percent (1%) in Q1 2012 vs. Q1 2011 to $240
“Prices rose in the first quarter as companies put travelers on the road to jumpstart 2012 business goals while supply remained relatively tight,” said Christa Degnan Manning, director, EXPERT INSIGHTS Research, American Express Global Business Travel. “To optimize travel budgets in this environment, companies should look at how they are encouraging compliance with corporate travel policies with positive motivators, instead of punishments for non-compliance. Travelers should be rewarded for booking with preferred suppliers and taking cost-saving measures such as advance purchasing in ways that they appreciate. Strategies like these can demonstrate support to travelers throughout their journeys.”
Informed Travelers Help Combat Rising Prices
Power to help optimize budgets lays more and more in the hands of the traveler. As suppliers maintain a position of strength, companies should re-examine their travel policies to reflect current market conditions and the needs of their travelers. When travelers feel that they are given support and guidance to make appropriate and educated buying decisions, they likely make smarter decisions with their corporate dollars. Helping travelers make smarter decisions include helping to making sure travelers not only know which providers are preferred, but also understand the benefits of using these suppliers over others. Travelers generally want to do what is best for their companies, but need to be clearly and simply told what that means and how they can help.
Business travel managers have long promoted a number of simple steps to drive savings in a program and help with compliance including:
Book in advance – Fourteen day advance purchase can offer better priced airfare and more flexibility, which for the traveler means more choices of when to fly and where to sit.
Go preferred – Booking travel with preferred suppliers helps to deliver against corporate volume goals but also helps to ensure companies are maximizing negotiated savings and travelers on negotiated benefits such as premier status upgrades.
Get the perks – Ancillary fee policy details provide guidance for travelers on what is pre-negotiated, permitted, or not approved helping them understand what their benefits are.
Make educated decisions – Mobile devices and messages mean policies are more accessible whenever travelers are making their buying and booking decisions which encourages smart buying decisions.
About the American Express Business Travel Monitor, North America
The American Express Business Travel Monitor is a key deliverable of American Express Global Business Travel Global Advisory Services’ EXPERT INSIGHTS research practice. Using U.S. business travel point of sale data, it benchmarks the average prices paid for air, hotel, and car rental services by class of service for hundreds of key business travel destinations globally through aggregate analysis of American Express’ extensive databases of travel booking and payment information.
The Business Travel Monitor includes both average published and business traveler purchased air fares captured across hundreds of domestic and international routes, including unrestricted first class, business, economy, and discounted, restricted economy air fares. The methodology for the average air fare paid is the one-way price paid by all travelers booked through American Express Global Business Travel, including taxes and fees at ticketing point of sale, for all routes.
Average booked hotel rates, both international and domestic, represent the total spending of all American Express Global Business Travel clients, excluding taxes, divided by the total number of room nights confirmed. The full Business Travel Monitor includes hotel averages by major city neighborhoods and category of hotel by price range. The average daily cost for car rentals is drawn from American Express Corporate Card data and includes all charges incurred, including mileage, gas, tax and insurance, divided by the average length of rental. Data for the distribution of rental class categories is drawn from all rentals booked by the entire American Express Global Business Travel customer base.
Categories: Market Reports
