The latest American Express Global Business Travel Forecast indicates that airfare in the business class sector is projected to increase by the end of 2010.
Using telepresence and teleconference technologies, eXpert insights, hired by American Express Business Travel’s Global Advisory Services, reported that business class airfares are expected to rise as a result of diminished capacity and demand for international business travel.
The 2010 forecast was telecast in a virtual press release that utilized a face-to-face gathering of people from New York, Brighton, UK and Mexico City. This demonstration of American Express’s Business Travel virtual meeting capabilities, and its potential for alternative business travel was overshadowed, however, by the gatherings emphasis on getting more business trips out of the same business budgets for the future.
“As the world begins to show signs of emerging from the recession, businesses are adapting to a fundamental shift in thinking focused on proving the value of travel and every employee connection,” said Herve Sedky, Vice President and General Manager of American Express Business Travel. “Heading into 2010, companies will need to consider the impact of these changes in mindset, particularly as projected rate increases in travel categories gain momentum.”
Because there was such a reduced demand for many services in the travel industry in 2009, revenues in all travel categories were down. Hotels were especially hit by this trend as they don’t possess the ability to reduce their capacity as airlines do. The travel forecast, however, anticipates a higher demand in the travel industry in 2010 for all services.
“Considering airfare, hotel, and ground transportation, we expect the average domestic business trip to increase 1.2 percent, or $13 USD, to a total of approximately $1,080 USD,” added Sedky. “An increase of 2.4 percent, or approximately $67 USD, is expected for international business trips to bring the average cost to $2,818. However, as unbundled and ancillary fees continue to add to the cost of trips, businesses should expect to add up to an estimated 15% percent to the total trip cost for air, hotel, and ground transport elements alone.”