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Small Business Digest


Costs For Business Air, Hotel Travel Up

The broad economic recovery may be slow, but business travel rates keep climbing due to strong demand and increasing supplier costs.

According to American Express research, domestic airfare and hotel rates are higher than a year ago and are expected to climb even more before the year is out.

One hoped for relief source, the repeal of certain federal taxes on airfares will not go into the pockets of travelers.  The repealed taxes, effective in July, were not past along to passengers but rather kept by the airlines.  This would have amounted to an average decrease of 3% on domestic flights and more to international destinations.

Here is what eXpert insights research at American Express Global Business Travel reports on key metrics.

 Rates Paid by North American-Based Business Travelers (Year-Over-Year Comparisons for May):

 Domestic Average Airfare Paid – Increased 7.5%

    • May 2011:$259
    • May 2010:$241


  • International Average Airfare Paid – Increased 8.7%
    • May 2011: $1,972
    • May 2010: $1,814

 Domestic Hotel Average Booked Rate – Increased 2%

    • May 2011; $156
    • May 2010: $153

 International Hotel Average Booked Rate – Increased 11%

    • May 2011: $254
    • May 2010: $229

 “Sustained demand and increasing costs have given suppliers pricing power throughout 2011, a significant shift from the recession,” said Christa Degnan Manning, director, eXpert insights research. “While airfares and hotel prices are likely to continue to rise, companies need to continue to invest in travel as they look to grow and expand this year. The focus needs to shift from elusive cost-reductions to achieving the most value through more – and more productive – trips from competitive travel budgets.”

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