American Express this week said international airfares in 2006 jumped 5.8 percent from 2005, representing the highest fares paid since they began monitoring them. American Express research also showed domestic airfares hitting a three-year high.
American Express Advisory Services senior practice leader for air Mitch Cwanger this week said that although capacity constraints, demand growth and higher fuel prices continue to drive fares higher, corporate travel buyers can mitigate costs through tighter policies, increased online booking and consolidated spending as well as leveraging long-haul spend to garner short-haul discounts.
Despite high occupancy and limited supply of hotel rooms in key U.S. cities, American Express noted only a 3 percent year-over-year increase in average domestic booked hotel rates in 2006, a softer increase than those noted by Smith Travel Research, which reported a 7 percent increase in room rates in its full-year report, released earlier this year
(BTN, Feb. 5).
American Express Advisory Services also reported, however, that budget-tier hotel rates had increased by 19 percent in the fourth quarter of 2006 compared with the same period in 2005. Priscilla Campbell, senior practice leader for hotels, attributed the jump to improved amenities and properties within the tier and more willingness from business travel buyers to trade down to such properties.
International hotel rates were up 8.5 percent in 2006 over 2005, the travel management company said.
Average daily car rental rates for business increased by 4.5 percent from 2005, Amex reported. David Balfour, senior practice leader for car rental, said increasing costs within car rental companies—particularly fleet costs, which had increased as much as 20 percent—drove the rate increase.