< PrevNext > European Biz Travel Spending Will Rise By Chris Davis / March 27, 2018 Share Buoyed by some of the strongest demand and highest occupancy seen in continental Europe in years, as well as a strengthening euro and British pound against the U.S. dollar, the daily cost of travel increased year over year in most of Europe’s Corporate Travel Index markets. Spending levels and forecasts are far less consistent in Africa and the Middle East. In the latter, a supply boom continues to outpace demand.For the 59 cities that comprise EMEA in this edition of the CTI, the average 2017 daily cost of an upscale hotel room, three meals and a taxi from the airport to the city center is $326.72 in. Last year’s CTI doesn’t represent an apples-to-apples comparison, as BTN replaced a melange of miscellaneous trip costs with the simpler taxi ride. Daily combined hotel and food costs, however, show a year-over-year increase of slightly less than 5 percent.In fact, despite seeing nearly a 7 percent increase in its daily hotel and food total, Zurich, which was last year’s highest-ranking EMEA city for travel costs, has been dethroned this year by the Omani capital of Muscat, where the 2017 daily business travel cost was $521.36. Don’t be fooled, though: Muscat’s lofty perch atop the CTI EMEA ranking is a function of its taxi costs. Only in Tokyo does it require more to travel from the airport to the city center than Muscat’s $191.In fact, Muscat’s 2017 daily hotel and food costs declined more than 6 percent from 2016, a common theme among cities in the Middle East. Excluding the taxi, travel per diems dropped year over year by 1.5 percent in Kuwait City, nearly 4 percent in Riyadh, more than 2 percent in Abu Dhabi, more than 3 percent in Dubai and almost 18 percent in Doha. In many of these cases, the culprit remains a significant influx of hotel supply paired with a depressed global market for oil prices. Due largely to these trends, BCD travel management consultancy Advito projects continued general softness in travel costs in the Middle East in 2018.EuropeA far different story occurred in Europe. Combined hotel and meal prices increased by at least 10 percent from 2016 to 2017 in 15 European cities. In Prague, Warsaw, Stuttgart, Lisbon, Madrid and Rome, the increases were at least 15 percent.One key cause is strong hotel demand throughout the continent. Occupancy rates in Europe in 2017 reached levels not seen since the early 2000s, according to lodging consultancy MKG Consulting. A second factor was the increasing strength of the euro versus the U.S. dollar and the British pound in 2017. CTI hotel rates are converted from local currency to U.S. dollars using the conversion rate on the date each hotel invoice was paid; food costs, meanwhile, are based on a Dec. 2, conversion rate, so there is no single date to assess for conversion rates. Deutsche Bank analysts expect the euro to strengthen further against the dollar in each 2018, 2019 and 2020.The weakness of the pound against the euro and the dollar is one reason British cities showed a year-over-year decline in business travel costs in the Corporate Travel Index. Combined hotel and food costs dropped 2.7 percent in London; almost 5 percent in Manchester, also the site of a 2017 terror attack; and under 1 percent in each Birmingham and Glasgow. Edinburgh increased about 2 percent.AfricaAfrica continues to be a mixed bag in terms of daily business travel spend. Combined hotel and food costs dropped by more than 20 percent in Lagos, the second straight major drop for the Nigerian city, and another indicator of a slow global price market. According to lodging research firm STR, “Nigeria’s hotel industry continues to be affected by a poor reputation around security concerns in the country.” Still, Advito projects sharply higher hotel rates in 2018, not only in Nigeria but also in areas like South Africa and Egypt, due to “massive pent-up demand for quality accommodations” and an influx of new branded supply.