Amex Reports Rising Business Travel Costs

American Express today said corporate travel clients during the second quarter on average paid higher hotel and car rental rates, and higher international airfares. Though domestic airfares declined further versus mid-2004 levels, they also have been on the rise since the beginning of this year.

Specifically, average fare paid among the company's corporate clients in the second quarter was $218 one-way, 7 percent below comparable 2004 measurements, but 8 percent above the first-quarter average fare.

"Despite the widespread price restructuring earlier this year that decreased airfares, fares continue to rise as more people fly and discounts become less available," said Andy McGraw, senior vice president and general manager of American Express Business Travel North America. "Furthermore, upward pricing pressures remain as the cost of oil continues its rise. Fares will likely climb in the coming months."

For now, average fare paid among the travel management company's corporate clients remains lower than levels measured in previous years. In fact, the one-way average fare paid has declined each year since 2000, when the number was $259. Amex tracks data through the Business Travel Monitor, which covers 329 domestic citypairs. The average fare paid is an aggregate measurement of client bookings, including first class, unrestricted and discount airfares.

Across 160 international routes, average fare paid by Amex corporate clients grew 6 percent year-over-year to $1,609 each way. Roundtrip first and business class fares also increased 6 percent, to $5,748 and $3,851, respectively. Both numbers grew one percent from this year's first quarter.

Meanwhile, American Express reported higher average booked hotel rates, for both domestic and international travel. In the domestic market, the average rate rose $7 from one year earlier to $135, while international rates averaged $214, up $19. Average rates are derived by dividing total American Express Business Travel client spending by total confirmed room nights.

In terms of average daily car rental costs, Amex reported a 2 percent year-over-year increase to $64.82, including all incurred charges.