American Express Predicts Robust Increases in Business Travel Pricing in Select Markets in Latin Ame
American Express Predicts Robust Increases in Business Travel Pricing in Select Markets in Latin America, Asia, and Eastern Europe in 2013
-- Overall Pricing Increases Modest as Economic Uncertainty Keeps Rates Relatively Flat in Most Mature Markets; Deceleration in Growth Expected to Temper Prices in China --
NEW YORK--(BUSINESS WIRE)-- According to American Express Global Business Travel in its Global Business Travel Forecast 2013, projected increases in business travel pricing in select markets in Latin America, Asia, and Eastern Europe indicate that road warriors will likely continue to travel in these regions to pursue business opportunities in 2013. At the same time, global economic uncertainty - particularly due to the fiscal crisis in Europe and deceleration of growth in China - is expected to curtail demand and keep rates in mature markets, as well as in China, relatively flat. Taken together, American Express Global Business Travel forecasts prices globally to increase only modestly.
"We are expecting a dynamic landscape for business travel in 2013, with prices likely rising to reflect companies' interest in doing business in growing economies such as Brazil, India, and Russia, but staying flat or even declining in those markets where growth is stagnant," said Hervé Sedky, Senior Vice President and General Manager, Global Business Partnerships & Premium Services, American Express Global Business Travel. "Our Forecast helps companies understand where in the world and in which categories prices will likely increase and by how much, so they can make smart and informed decisions about how their investment in business travel is best allocated."
Through meticulous research and expert analysis of one of the most comprehensive travel and payment data repositories in the industry, the Global Business Travel Forecast 2013 provides nearly 2600 predictions across air fares, hotel rates, and car rental rates in 29 countries. This year, the report adds four new markets (Italy, Poland, Russia, and South Korea) and introduces predictions for published air fares in addition to paid fares, since understanding this gap is integral to companies looking to effectively manage their business travel programs in today's marketplace.
"Our Forecast goes beyond mere figures representing the prices a supplier is expected to charge to provide recommendations around other factors to consider - including who is paying what, where, when, and why - in order to help our clients gain a more complete picture of pricing dynamics and develop the most effective travel management strategy to take advantage of them," continued Mr. Sedky.
While only conservative increases in pricing are expected in North America (the U.S. and Canada), American Express Global Business Travel predicts Latin America's strong economies and resulting consistent travel demand to likely result in robust price increases in that region in 2013.
In North America, despite uncertainty resulting from the upcoming U.S. presidential election and economic discord in Europe, steady trip demand and capacity discipline is expected to drive increases in business-class air fares of 1 - 3% for both short- and long-haul routes. Economy fares vary, with short-haul routes predicted to rise 2 - 4% and long-haul route pricing staying flat at (-1) - 2%. Although limited numbers of hotel rooms are expected to be added in 2013, moderate occupancy growth is nevertheless expected to drive increases of 2 - 7% in mid-range hotel rates and 4 - 9% in upper-range hotel rates. Increased competition is predicted to drive car rental rates down, although the average daily rate is expected to rise slightly due to some increases in ancillary fees.
Although foreign carriers have added capacity throughout Latin America, the consolidation of some of the regional carriers along with strong economies and consistent demand are predicted to contribute to healthy air fare increases in the region in 2013. American Express Global Business Travel predicts short-haul economy fares to rise 7 - 10%, long-haul economy fares to rise 5 - 8%, short-haul business fares to rise 3 - 6%, and long-haul business fares to rise 4 - 7%. While the hotel construction pipeline remains tight, continued economic growth and middle-class consumer demand are predicted to drive increases in overall hotel rates in the mid single digits. The majority of this growth is expected to come from Brazil and Argentina.
Europe, Middle East and Africa (EMEA) Highlights
The currency crisis surrounding the euro, austerity measures, and generally low growth expectations are predicted to drive only low single-digit air fare increases in EMEA in 2013. Those markets hardest hit by the euro zone crisis may even see declining fares. Spain, for example, is projected to experience decreases in long-haul economy fares of (-8) - (-5) %. There are outliers bucking the trend in the region, however, such as Russia (with long-haul economy fares projected to be up 5 - 7%) and Poland (up 3 - 5% for the same type of fare), which are distanced from the euro zone's troubles. Similarly, South Africa is expected to see strong growth thanks to its positioning as the gateway to southern and western Africa and the natural resources based in those regions.
American Express Global Business Travel expects only conservative increases in corporate hotel rates, despite relatively constant hotel room capacity. The European hotel market in particular has seen little expansion as recent economic crisis has constrained investment. Russia, the Middle East, and Africa, however, are expected to see moderate growth. Car rental prices in EMEA are expected to be relatively flat in 2013, given the many ground transport alternatives - including new bicycle and car sharing programs, car services, and rail - in a European market that is economically anxious, environmentally-sensitive, and population-dense. Again, South Africa is expected to be an outlier when it comes to car rentals, with positive growth.
Asia Pacific (APAC) Highlights
The APAC region exhibits wide variation country to country. For example, Australia's domestic travel market is very competitive, but demand from the natural resources sector is nevertheless expected to support moderate rate increases. India is projected to see the greatest fare increases in the region, of up to 8%, largely as a result of volatility in that market's air industry. Meanwhile, in China, a decline in exports, slowing construction and manufacturing sectors, and impact from investments in Europe are expected to result in declines in business travel demand and pricing that is flat to slightly down overall. For domestic flights, in particular, competition from high-speed rail is predicted to exert pricing pressure on both business and economy segments in China.
Hotel rates in APAC, like airfare, are expected to differ widely at both the country and city levels. Within China, for instance, predictions reflect the fact that prices in Shanghai suffer from an excess of supply, while in Beijing demand is beginning to outstrip supply.
For details on how to purchase the Forecast, which includes numerous more insights into air fares and hotel and car rental rates in markets throughout the world, please contact email@example.com.
About the Global Business Travel Forecast 2013 and Methodology
The Forecast is a key deliverable of American Express Global Business Travel Advisory Services' EXPERT INSIGHTS research practice, which also produces monthly industry analysis, the Business Travel Monitor pricing index, and detailed travel program best practices and benchmarking reports.
The Forecast is based on a number of primary data sources, including proprietary data from the American Express Business Travel Monitor, the American Express contracted rates database, aggregate transaction data, and secondary data sources including Smith Travel Research (STR) Global Hotel Reviews and economic data projects from Economywatch.com. Projections were based on a combination of these primary and secondary sources and interviews with American Express category and regional experts. All ranges represent forecasted year-over-year changes in negotiated business travel rates.
Although the forecasts and projections provided in the report are based on information gathered from internal and external sources that American Express Global Business Travel believes to be reliable, no representation or warranty is made as to the accuracy of the forecasts or projections made herein. In addition, actual changes in business travel costs could vary significantly from forecasted data, particularly as a result of unforeseen future political, economic, and/or environmental events.
About American Express Global Business Travel
Positioned at the intersection of commerce and travel, American Express Global Business Travel offers its customers a comprehensive network, dependability, and deep insights to help move people and businesses forward. American Express Global Business Travel provides leading travel solutions, integrated consulting services, proprietary research, and end-to-end meetings and events capabilities. These innovative offerings enable clients to optimize the return on their travel and meetings investments. Learn more at www.americanexpress.com/businesstravel.
American Express Global Business Travel is part of one of the world's largest travel agency networks with locations in over 140 countries worldwide. Total travel sales volume processed in 2011 was $29.3 billion, including consolidated volume and non-consolidated volume processed through joint ventures and its partner network.
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, foursquare.com/americanexpress, linkedin.com/companies/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.
KEYWORDS: United States North America New York
The article American Express Predicts Robust Increases in Business Travel Pricing in Select Markets in Latin America, Asia, and Eastern Europe in 2013 originally appeared on Fool.com.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.