Major study says travel costs going up, up up
Worldwide airfares and hotel rates are expected to increase in 2006, according to a new study by the world’s largest travel agency.
American Express Business Travel in its annual forecast sees increasing demand for travel.
As a result, suppliers will feel pressure to recover their losses, reduce the impact of higher fuel costs and even become more profitable.
“Corporate clients are traveling more, and increased globalization is leading to strong demand for long-haul air travel and hotel space at their travelers’ destination,” said Matthew Davis, director of global consulting.
Examples:
- US economy airfares are expected to rise anywhere from 5 to 8%.
- Globally, short-haul flights will rise up to 6%, while long-haul flights might be up to 5% more.
- North American hotel rates could rise as much as 3% at mid-scale properties and up to 5% at higher-end hotels.
The report, which publishes regional and global trends, envisions strong business travel demand for North America, Europe, and Japan. Australia and Asia-Pacific will also see higher rates similar to North America, according to the report.
The report said that while pricing pressure is strong throughout the airline industry, the competition from low-cost carriers will limit major airlines’ ability to raise fares in many markets.
Report by David Wilkening
David
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