American Express sees air fares heading higher again next year

International business class travelers can expect to see their average ticket price increase by 5 to 10 percent for trips to and from North America in 2008, according to the latest Global Business Travel Forecast from American Express. “Fuel costs, improvement in airline inventory and pricing technology, capacity constraint and demand for long-haul are likely to drive price increases,” the company said. On the positive side, “We anticipate that greater competition through the USA-EU Open Skies Accord, growth of low-fare pricing models and more efficient aircraft will temper increases,” AmEx added. The Open Skies pact takes effect at the end of March 2008. Air fares for domestic/short haul trips in economy class are only expected to show 2008 increases of 1 top 5 percent, the company predicted. Hotel prices look to grow even more, the company said, projecting an average annual increase of 11 to 14 percent in room rates at mid-range and upper-range hotels. “High demand and slow growth of supply is likely to force prices up and will impact access hoteliers give to last-room availability rates,” American Express said. “Companies may also encounter minimum and maximum stay requirements, and instances when corporate rates do not apply.” Higher room rates will be the primary factor in an expected increase of 8 to 10 percent next year in the cost of holding business meetings, AmEx said.