American Express Global Business Travel Predicts Country-Specific Economic
Trends and Supply-Side Dynamics to Drive Changes in Business Travel Prices
Subdued global economic growth is not likely to impact business travel demand;
road warriors expected to continue pursuing business across the globe
NEW YORK -- October 30, 2013
According to the American Express (NYSE:AXP) Global Business Travel Forecast
2014 (the “Forecast”), country-specific, rather than global, economic trends –
such as Brazil’s preparation for upcoming global sporting events, Germany’s
relative economic strength within the Eurozone and China’s slower but
stabilizing growth – are expected to contribute to a slight uptick in business
travel prices within specific regions. In addition, supply-side dynamics,
including more low cost carrier options, weaker demand for business class air
travel due to more stringent corporate policies and lack of new hotel
construction (or oversupply in some areas) across specific regions are
expected to have a greater impact on pricing changes. The Forecast provides
subscribers with over 2,100 pricing predictions across airfares, hotel rates,
and car rental rates in the Americas; Europe, Middle East and Africa (EMEA);
and Asia Pacific (APAC), as well as related travel management program
“In this environment we recommend travel managers emphasize access to relevant
and reliable data and reporting in order to really understand their travel
program and to help ensure their travel investments are allocated to support
their overall business objectives,” said Janey Whiteside, Senior Vice
President and General Manager, American Express Global Business Consulting &
Solutions. “Gaining this understanding can in turn help improve supplier
relationships, illuminate compliance gaps and ultimately help enable companies
to remain flexible and nimble enough to adjust to changing travel and business
2014 Global Business Travel Forecast
Short Long Short Long
Region Haul Haul Haul Haul Mid-Range Upper-Range Car Rental
Business Business Economy Economy Hotel Hotel Rates
North -13 to 3% to 6% 0 to 3% -4% to 2% to 5% 3.5% to 1% to 1.5%
America -8% 0% 5.5%
Latin -2% to 2% to 5% -2% to -3% to 4% to 8% 3% to 7% 3% to 3.1%
America 2% 1% 0%
EMEA -1% to 0% to 3% 0% to -2% to 0.4% to -0.4% to 0% to 2%
2% 2% 1% 6% 4.2%
APAC 0% to 5% 1% to 5% 0% to -1% to 0% to 6% 0% to 6% predictions
4% 3% are included
Americas Predictions & Dynamics
Overall, North American business travelers can likely expect mixed price
changes across travel categories in 2014. With minor exceptions, North
American airfares are expected to decline in 2014 as a result of heightened
competition from low cost carriers, challenging unemployment levels and
corporate travel policies becoming more stringent in regard to business class
travel. However, pending consolidation among major U.S. airlines may offset
these expected declines.
Predicted hotel rates in North America are expected to be up overall; however,
the predictions for individual cities are expected to vary widely. Hotel
prices in North America’s main travel regions – key business and tourism
destinations such as New York and Toronto – will likely continue to grow, but
it appears that secondary locations have become saturated with supply and are
expected to be more competitive.
Consolidation continues in the North American ground industry and car
manufacturers are expected to increase prices on their fleet. Car rental
companies may pass the higher costs on to their customers, which may result in
moderate price increases in car rental base rates. Key suppliers are also
exploring car sharing programs in specific regions as an alternative that can
offer increased flexibility and lower costs for corporate clients compared to
As Latin America’s larger economies slow down after a period of growth,
changes in airfare and hotel rates are likely to vary country-to-country.
Local economies in Argentina, Brazil and Chile are expected to have the
greatest impact on business travel costs in the region in 2014.
Demand from U.S. companies with manufacturing facilities in Latin America will
likely help create a seller’s market and contribute to mid- and upper-range
property increases. Brazil is expected to continue to lead in occupancy
levels, and in preparation for a global sporting event taking place in 2014,
may also experience additional increases in hotel rates next year.
In the ground transportation category, rising demand is likely to translate
into base rate increases, especially as activity from multi-national companies
and new hotel construction increases in the region.
EMEA Predictions & Dynamics
Companies should expect to pay slightly more overall for business travel in
EMEA in 2014, as suppliers likely make adjustments across air, hotel and
ground transportation categories, all of which are expected to remain
relatively flat or experience slight increases in the region. In response to
more competition from a strengthening rail industry, which is expected to
improve its business class options, larger airlines are expected to follow the
model of low cost carriers.
Hotel rates are expected to increase in nearly all countries and categories in
2014, resulting in an overall prediction of increases in both mid-range and
upper-range categories for EMEA. Germany, which boasts one of the stronger
economies in the European Union, is also expected to see relatively higher
increases in hotel prices in 2014.
Rail travel in Europe can be preferred by business travelers for
intra-European trips. European car rental suppliers will likely adjust to
price sensitivity and traveler needs by offering a number of alternatives to
traditional daily car rentals, including car sharing options and introducing
their lower cost rental brands.
Outside of Europe, airlines in the United Arab Emirates, which has maintained
steady economic growth, are expected to add capacity and new global
destinations, likely causing short- and long-haul business fare predictions to
decline. Hotel prices are expected to rise in the United Arab Emirates, even
with growing supply, as the region remains an attractive business destination.
Although the United Arab Emirates continues to be a developing country for
rental cars, rates are expected to increase due to communication campaigns and
websites now in local languages.
APAC Predictions & Dynamics
Driven by China’s slower but stabilizing growth, APAC will likely see rate
increases across most categories. Individual country predictions tend to be
positive, as well; however, as is the case in other regions, considerable
variability across the region is expected.
Hotel rates across the APAC region are expected to see rate increases, as the
region continues to grow economically and supply is not expected to outstrip
demand in most locations. The exception is India, which may experience slight
Car rental prices are expected to increase slightly due to expected growth
within the region. However, across APAC, chauffeurs and public transportation,
including trains, will likely continue to be more popular and practical for
local transportation in most cases.
For details on how to purchase the Forecast, which includes more insights on
airfares, hotel and car rental rates in regions throughout the world, please
contact GlobalBusinessConsulting@aexp.com or visit
About the Global Business Travel Forecast 2014 and Methodology
This year marks the 10^th anniversary of the American Express Global Business
Travel Forecast, which has evolved into a leading global perspective of
business travel industry designed to help corporate executives to better align
their plans and policies to maximize the strategic value of their business
The Forecast is a key deliverable of American Express Global Business
Consulting 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, Center for Asia Pacific Aviation (CAPA), Airline Weekly and economic
data projects from Economywatch.com.
With the 2013 transaction trends and expected global expenditure context in
hand, American Express Global Business Consulting subject matter experts
consider their recent front-line industry and contract negotiation experiences
to predict specific expected price changes by country and region. This
Forecast also takes care to make predictions by fare type or classes of
service for air and hotel as price changes prove to differ within these
variables. 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, service
dependability, and deep insight 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 businesstravel.americanexpress.com.
American Express Global Business Travel is part of one of the world's largest
travel agency networks with locations in 138 countries worldwide.
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
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