Air Travel News
Survey sees trip costs rising faster than corporate travel budgets
A recovering economy means greater demand for business travel services, and that is expected to push the cost of travel higher in 2013 — significantly higher than many companies are willing to increase their budgets, according to a new survey from the Global Business Travel Association (GBTA) Foundation.
The poll of some 300 corporate travel buyers in the U.S. found that they expect to see economy air fares go up 4.6 percent on domestic routes (to an average of $492 per trip) and 8.3 percent in international markets (to $1,318) this year. International premium economy and business class seats are expected to cost 7.6 percent more on average in 2013, the survey found. The travel buyers also anticipate a 3.7 percent boost in U.S. hotel rates, to an average of $161 a night; and an 8 percent jump in overseas lodging costs, to $297.
“However, buyers expect just a 2.9 percent increase of their budgets — which will struggle to keep pace with projected rate hikes,” GBTA observed.
“Travel prices will be rising across the board, with international price growth especially robust as companies look abroad for opportunities,” said GBTA’s vp of research, Joseph Bates. “Travel buyers are being pushed to balance higher costs, the need to get travelers on the road, and corporate budget constraints.”
The companies surveyed said they expect about 30 percent of their travel budgets this year to be spent on international trips. While two-thirds said higher airfare and hotel prices will be the top factor driving increased spending this year, some 60 percent cited new and increased airline fees as the primary factor.
Meanwhile, “Travel buyers are gearing up for a challenging negotiating landscape with hotels, airline and meeting venues,” GBTA said. “In fact, nearly half of buyers (48 percent) think that negotiated discounts with hotels will be worse in 2013; 29 percent say the same about airline discounts and 28 percent about meeting venues.”