American
Express Global Business Travel's 2014 corporate travel forecast predicts a wide
spectrum of changes to North American airfares. Issued Wednesday, the forecast calls
for a year-over-year decline of as much as 13 percent for short-haul business-class
fares and an increase of as much as 6 percent for long-haul business class. Changes
to economy-class airfares fall in between, with short-haul prices on average ranging
from no change to a 3 percent increase and long-haul prices falling by as much as
4 percent.
The
general decline expected for North American airfares will result from "heightened
competition from low-cost carriers, challenging unemployment levels and corporate
travel policies becoming more stringent in regard to business-class travel,"
according to Amex. "However, pending consolidation among major U.S. airlines
may offset these expected declines."
For
North American hotels, the 2014 forecast range is much narrower: a 2 percent to
5 percent year-over-year increase predicted for "mid-range" hotel rates
and a 3.5 percent to 5.5 percent increase for "upper-range" hotel rates.
"However, the predictions for individual cities are expected to vary widely,"
Amex wrote. "Hotel prices in North America's main travel regions—key business
and tourism destinations such as New York and Toronto—will likely continue to grow,
but it appears that secondary locations have become saturated with supply and are
expected to be more competitive."
Car
rental rates, meanwhile, next year will rise in North America between 1 percent
and 1.5 percent year over year, according to Amex, which suggested car rental companies
may attempt to pass along higher fleet costs.
Generally,
Amex anticipates that "country-specific, rather than global, economic trends"
in 2014 will contribute to "a slight uptick in business travel prices within
specific regions." In Latin America, airfare changes will range from a 2 percent
decline versus 2013 to a 5 percent increase, depending on class of service and length
of haul, while hotel rates increase by mid-single-digit percentages as "demand
from U.S. companies with manufacturing facilities in Latin America will likely help
create a seller's market," Amex wrote.
Across
Europe, the Middle East and Africa, Amex expects airfares to move just a few percentage
points up or down while mid- and upper-range hotel rates rise as much as 6 percent
and 4 percent, respectively.
In
the Asia/Pacific region, corporate travel prices generally are expected to rise
across travel categories, up to 5 percent on some airfare types and up to 6 percent
for hotel rates. "The region continues to grow economically, and [hotel] supply
is not expected to outstrip demand in most locations," Amex explained.
Amex
is the latest corporate travel management company to issue a 2014 price forecast,
following those from BCD Travel's Advito and Carlson Wagonlit Travel which called
for generally modest price increases. The Amex forecast is based on proprietary
data including "aggregate transaction data" as well as external sources.