AMERICAS - Companies in North America are expecting a better year for business travel, but rising rates and tough negotiations loom, according to the latest research from the Global Business Travel Association (GBTA).
The GBTA Foundation’s 2013 Industry Pulse: Business Travel Buyers’ Sentiment report shows expectations are for some big jumps in international airfares and hotel rates, while business travel budgets are expected to remain tight.
International travel will see the largest price jumps as companies ramp up demand to build their business globally.
Key findings from the new research include:
- Buyers expect prices to increase from 4.6 per cent for domestic economy airfare (to US$492/trip) to 8.3 per cent for international economy airfare (to $1,318/trip).
- Hotel rates will rise 3.7 per cent for domestic hotels ($161) and eight per cent for international ($297).
- Yet buyers expect just a 2.9 per cent increase of their budgets, which will struggle to keep pace with projected rate hikes, making smart travel management programmes all the more important.
The buyers’ responses indicate hotels, airlines and meetings venues are set to capitalise on growing demand to wield more power in negotiations with corporations that spend on business travel.
“Travel prices will be rising across the board, with international price growth especially robust as companies look abroad for opportunities,” said GBTA VP of research Joseph Bates. “Travel buyers are being pushed to balance higher costs, the need to get travellers on the road, and corporate budget constraints. Strategic travel management programmes will play a key role for companies dealing with a tougher negotiating environment and focused on getting the most out of their travel spending.”
Other statistics to come out of the report included international travel spending likely to comprise 30 per cet of total business travel budgets according to those surveyed.
Two in five travel buyers (42%) believe that higher spending will be driven by more trips and a third expect to spend more because they are putting more travelers on the road.
Travel buyers are gearing up for a challenging negotiating landscape with hotels, airlines and meeting venues. Nearly half of buyers (48%) think that negotiated discounts with hotels will be worse in 2013; 29 per cent say the same about airline discounts and 28 per cent about meeting venues.
Travel buyers are slightly more optimistic about the state of the economy: 37 per cent feel it’s doing better, 48 per cent believe it’s the same and 15 per cent say it’s worse.
The GBTA 2013 Industry Pulse: Business Travel Buyers Sentiment report surveyed 297 travel buyers in the US in October 2012. It is available exclusively to GBTA members from the foundation.
Collectively, GBTA’s 5,000-plus members manage $340bn of global business travel and meetings expenditure annually.
GBTA announced the formation of a GBTA Russia chapter, to be officially launched in Moscow on 8 April.
GBTA’s senior VP of global operations, Paul Tilstone (pictured), said about the development: “GBTA is thrilled to be expanding its global footprint to Russia. Russia is becoming an important and exciting travel management arena. Establishing this region will allow us to work closely with Russian travel professionals, adding value through our education and advocacy while connecting them with their peers throughout the world.”
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