GBTA Reports Firms Bracing for Higher Rates Oct 26, 2011
Wednesday, 26 October 2011 00:00
By Kate Rice in Travelpulse
Companies in North America and Asia Pacific are expecting airfare and lodging rates to climb next year and bracing for these increases by upping their travel budgets, travel managers report.
Negotiations with airline and hotel suppliers for 2012 were also tougher this year, with buyers citing stricter volume commitments and expecting less generous discounts, according to a recent survey of North American- and Asia-Pacific-based travel buyers by the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA).
With the exception of domestic car rentals, buyers expect average airfares and hotel rates in North America to rise between 3 percent and 5 percent in 2012. Buyers expect average rates/fares to rise between 4 percent and 6 percent in Asia Pacific.
Buyers expect domestic airfares to increase the most in 2012, with North America projecting a 5 percent increase to an average fare of $487. Buyers also expect international economy and business class fares to increase.
Projected increases for domestic hotels are 4.1 percent in North America, and 4.9 percent in Asia Pacific. International hotel increases are projected to increase 3.3 percent in North America and 4.4 percent in the Asia Pacific region. In both regions, higher travel rates (North America, 69 percent; Asia Pacific, 52 percent) and airline fees (North America, 58 percent; Asia Pacific, 53 percent) were most often cited as the primary factors driving increases in travel budgets. More than half of buyers in North America (53 percent) said terms for 2012 were stricter relative to volume and market share thresholds from airlines. Somewhat fewer than half of respondents (45 percent) felt this way in the Asia Pacific.
A substantial majority of buyers said the discounts yielded in negotiations are expected to be the same or worse in 2012 from airlines (North America, 74 percent; Asia Pacific, 77 percent) and hotels (North America, 88 percent; Asia Pacific, 76 percent). International travel is a major force behind increases in travel spend because international trips typically cost more. Buyers projected international spend would comprise a healthy portion of total travel spend in 2012 -- 32 percent and 54 percent, respectively, for North America and Asia Pacific. For more information, visit www.gbta.org or www.gbtafoundation.org
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