Travel collapse is over?
There are clear signs that the business-travel industry, which drives the fortunes of a large segment of the economy including airlines and hotels, is gradually coming back, suggests the New York Times.
“That collapse has ended.
Most domestic airlines recently reported healthy second-quarter profits, citing a rebound in business travel. After two of its worst years ever, the hotel industry is digging out,” the newspaper says.
American Express reported that airfares had risen substantially and were climbing “steadily towards prerecession levels” in the first half of this year. Though hotel rates are down slightly, travel managers are finding that negotiations with hotels for next year have become tougher.
Airfares are now the highest they have been since the start of 2008, said Christa Degnan Manning, a research director with American Express Business Travel.
“With travelers on the road again, air suppliers have gained ground in pricing power, and the end of hotel rate drops is likely near,” she said.
That may be great for shareholders of airlines and hotels, but not necessarily for travelers.
Corporate travel managers are insisting on adherence to strict travel policies, like staying at chains where they have negotiated discounts. After all, they’re dealing with airlines that so far have kept smaller capacity in line with demand.
At the same time, airline mergers are leading to less competition, while worldwide alliances are allowing carriers to meld routes and operations.
“With volume returning, airline alliances and mergers increasing, and increased competition for the airplane seats available, companies need to be more aggressive this year to find the best fares,” Manning said.
The tight budgets mean business fliers and travel managers will “need to have more agility,” said Lane Dubin, a vice president for American Express Business Travel.
By David Wilkening
David
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