Meeting News - October 19, 2009 - (Page 54)

Travel Dashboard Budget Planner 2010: Air Costs Up By Michael B. Baker, Jay Boehmer & Seth Harris Buyers should expect 2010 airMuch of the airlines’ ability to demand for business travel is fares to increase by single-digit raise prices in 2010, even with stark down,” he added. “It’s hard to say. percentages and hotel rates to fall, demand declines, will come as a Some say it might be firming up a especially in the early part of the result of moves to significantly little bit, but firming up just means year, according to industry fore- reduce capacity this year. the bleeding has stopped.” casts that project total trip costs to Those aggressive capacity cuts, Airline pricing remained soft creep up in the second half of 2010 which began taking hold a year ago this year, even though low-yield as economic activity and, in turn, in response to the fuel crisis and leisure travelers propped up high business travel begins to increase. broadened this year after demand load factors. “Definitely, things American Express Business replaced oil as carriers’ major con- started to firm up a little bit in Travel expects the average cost of a 2010 U.S. Travel Costs Likely Variable North American Expected U.S. price change vs. 2009 domestic business trip, which includes Domestic economy airfare 2% to 7% air, ground transInt’l business class airfare 3% to 8% portation and hotel Upper-tier hotel rates -4% to -2% accommodations, Midprice hotel rates -3% to -1% to remain nearly the same as in 2009, June, but it was in a Source: American Express Business Travel 2010 Global Business Travel Forecast with just a $5 complete freefall from decrease in cost per trip to $1,108, cern, will help carriers stabilize November through May—the according to the company’s 2010 prices, said BCD Travel consulting cheapest I’d ever seen,” Seaney said. Global Business Travel Forecast, unit Advito vice president of busiTravel buyers also should expect released late last month. It projects ness development Bob Brindley. some moderate airfare increases North America-originating inter“I wouldn’t be surprised to see abroad. national trips to increase by an prices go up slightly for 2010,” he According to American Express, average of 3.5 percent to $3,413. said.“That’s taking out any kind of European domestic and short-haul Amex predicts U.S. domestic fuel impact or H1N1 impact, but economy airfares will remain flat and short-haul economy fares to looking purely at demand and or increase by as much as 2 percent increase 2 percent to 7 percent and capacity, I would expect the capac- next year, and international and international and U.S.-originating ity reductions to result in some long-haul business fares will rise 5 long-haul business fares to rise 3 marginal price increases.” percent to 7 percent. percent to 8 percent from 2009. Airfare analyst and FareComThese increases will come gradCarlson Wagonlit Travel’s 2010 CEO Rick Seaney said, ually next year as business travelers North American forecast, released “Year over year, fares are down return to the skies with expected in August, estimates published air- anywhere from 12 to 14 percent, economic improvement and as airfares for all classes will increase 3 but it’s not a good comparison, lines continue to adjust capacity, percent to 5 percent over 2009 because fuel this time last year was said Joakim Johansson, vice presiprices. The travel management still over $100 a barrel. Most fuel dent of Amex global advisory servcompany sees international econo- surcharges weren’t dropped off last ices for Europe, the Middle East my class fares rising 4 percent to 6 year until the end of October. and Africa. percent and business class fares 5 “The supply of seats is probably On the hotel side, the buyer’s percent to 8 percent. correct, but the problem is the market is expected to continue at 54 MeetingNews October 19, 2009 least for the first half of the year. “Most markets will see reductions for 2010, especially for those who haven’t already renegotiated,” Advito’s Brindley said. “A lot of hotels have been trying to hold the line on prices and have offered to extend 2009 deals through 2010. It might be appealing to some clients, but given a buyer’s market, that is short-sighted.” American Express’ forecast has U.S. average daily mid-tier hotel rates falling 1 percent to 4 percent, and 3 percent to 6 percent at upper-tier properties. Hotels in several top U.S. business travel destinations also will suffer rate losses. Amex said New York’s average daily rate would remain flat or decrease by as much as 2 percent for mid-tier properties, with uppertier rates dropping from 1 percent to 4 percent. The forecast predicted rates in San Francisco to fall by as much as 5 percent. CWT said domestic average daily room rates would decrease about $10 compared with 2009 rates, taking into account promotional rates and upgrade offers. CWT Solutions Group Americas director of hotel consulting Neysa Silver in August said decreases in corporate negotiated rates would depend on when buyers negotiated hotel programs. For those completed last fall, CWT forecasts U.S. average daily rates to decrease 6 percent to 8 percent. Buyers who negotiated closer to the end of 2008 should see rate drops of 1 percent to 3 percent.

Table of Contents for the Digital Edition of Meeting News - October 19, 2009

Meeting News - October 19, 2009
Meeting Post
Meetings Spotlight
Event Profile
Construction Cites
Meeting People
Association Watch
Gaming Destinations
Dateline: Florida
South Regional
Dateline: Guadalajara
Travel Dashboard

Meeting News - October 19, 2009