Amex Study: Buyers Save On Air, Hotel Rates
The latest American Express Business Travel Monitor, released today, showed declining air travel and hotel costs for the company's corporate travel clients on a year-over-year basis. The study, however, found higher quarter-over-quarter numbers in certain airfare categories.
The average one-way fare paid in the second quarter by American Express corporate travel customers increased 2 percent from the first quarter, to $280. That number, compiled from booking data covering 215 domestic routes, was 2 percent below last year's average fare paid, according to the Business Travel Monitor.
More specifically, the average one-way typical business fare in the domestic market during the second quarter--defined as the lowest fully refundable economy fare booked up to three days advance--fell to $545, a 2 percent decrease from the first quarter and a 4 percent drop versus last year.
American Express said the 49 percent difference between the average typical business fare and average fare paid was marginally down quarter over quarter and year over year due to falling walk-up business fares and increased use of nonrefundable fares.
Meanwhile, alternate business fares--which carry some but not all of the traditional restrictions placed on discount fares--in July were 33 percent lower than typical business fares. The lowest one-way discount fare, on average, was $93 in the second quarter, flat from the first quarter and up marginally compared with last year.
"Airlines continue to aggressively pursue the business traveler," said Brian Mogler, vice president of supplier relations for American Express Corporate Services, "but they're keeping the 'for sale' sign out to get them on planes."
For 160 international routes to 39 destinations, second-quarter average fares paid by Amex corporate clients increased 4 percent from the first quarter but declined 3 percent versus last year. That yearly drop, to $1,474 one way, came despite higher business class and discount economy fares on those routes. Amex cited declining client usage of international business class.
Travel managers also were able to achieve cost-savings in their hotel programs during the quarter, indicating that the buyer's market, which has prevailed for the past two years, continues. According to survey results, negotiated North American hotel rates for Amex corporate clients fell 3 percent from the second quarter of 2002. In addition, rates slipped 1 percent from the first quarter.
BTM results also confirmed that buyers are using more midprice hotels as a cost-saving measure, confirming the trend, first evident last year, toward trading down.
The report also found daily car rental costs--inclusive of base rate, mileage, gas, tax, insurance and other charges--dropped 1 percent in the second quarter, versus the first quarter, to $63.92. That number is up 1 percent versus last year.