Advito Predicts Growth In 2009 Travel Costs

Advito, BCD Travel's consulting arm, expects U.S. travelers and corporations to experience at least a 13 percent average increase in combined air, hotel and car rental costs next year and possibly higher in international markets, according to its 2009 Industry Forecast released this month.

Worldwide published airfares will increase on average 6 percent to 8 percent over 2008 fares and Advito estimates additional fees from unbundled services and checked-bag surcharges have the potential to add 3 percent to 5 percent on top of base fare increases. Regionally, North America is expected to have the sharpest fare increases, 8 percent to 10 percent on both intra-regional and intercontinental flights. Europe has a more moderate outlook with intercontinental airfare increases at 5 percent to 7 percent on average. Intra-European airfares are expected to rise 3 percent to 5 percent.

Buyers should expect airlines to be more aggressive in reviewing corporate contracts as "they were pushing those contracts and threatening to pull out of them, but I haven't seen many canceled," Advito vice president Bob Brindley said. "We had situations where we felt the performance was strong, but the airlines felt it wasn't strong enough. They were definitely pushing back" by encouraging corporations to "provide additional business or pull that deal and reallocating discount resources somewhere else."

While Advito predicts global hotel rates to grow by 4 percent to 8 percent, the category forecast represents double-digit percentage-point increases on average in the Middle East and Asia/Pacific, and mild U.S. increases, especially in secondary markets.

According to the consultancy, North America average rates will increase between 0 percent and 3 percent, with higher increases in such large markets as New York. Meeting costs will mirror the transient hotel market and increase 4 percent to 8 percent. Advito expects U.S. car rental costs to increase on par with last year, at 3 percent to 4 percent, due to higher rates and additional service fees.