North American corporate buyers see recovery signs
Corporate travel buyers sense an improving economy and a healthier travel industry, leading to higher airfares, hotel rates and car rental prices, and more challenging supplier negotiations amid growing demand, according to a new survey.
“These and other findings add to mounting evidence of a general corporate travel recovery,” said the National Business Travel Association (NBTA), which did the survey.
“Stemming from a combination of larger travel volumes and rising fares and rates, survey respondents — all from North America, representing a cross-industry sample — anticipated that total 2010 travel spending at their organizations would be up from last year by an average of 5.5 percent,” the survey said.
According to the NBTA Foundation, for 2011, buyers on average projected an average 4.45 percent year-over-year increase.
American Express also recently issued projected 2011 cost increases — ranging from 2 percent to 10 percent for airfares around the globe, and 1 percent to 10 percent for hotel rates — and also predicted tougher rate negotiations.
According to the NBTA Foundation research, international travel spending is a primary contributor to overall spending growth, with an average annual increase among the survey base of 13 percent in 2010 and 11.4 percent in 2011.
“That compares to average domestic spending increases of 2.5 percent this year and 1.5 percent next year. As a share of total spending, international travel on average is expected to increase from 28 percent in 2009 to 32 percent in 2011.
The most cited factor behind the expected overall travel spending growth was higher rates/fares (67 percent), followed by increased airline fees (64 percent) and more trips (51 percent).
“Respondents also pointed to increased hotel fees (32 percent), increased car rental fees (18 percent) and higher food costs (16 percent). Thus, inflationary pressures are certainly being felt by travel buyers," according to the NBTA Foundation.
By David Wilkening
David
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