The cost of business travel has been steadily increasing held down only by the low airfare as the airline industry was in transition and the battle for market share. Now that Southwest has raised their airfares, it seems that all sectors of business travel are increasing. Higher gas prices have pushed up car rentals, and high demand coupled with increased building costs has led to higher hotel costs.
This all combined to tell business travelers will be paying a fair bit more in 2006.
“For 2006, however, the pricing trend lines indicate that corporate travel buyers will face a tough negotiating environment across the board,” American Express Business Travel North America General Manager Andy McGraw said.
The past year has been especially good to U.S. hoteliers, who have been able to steadily increase room rates as business travel increased in a growing economy and supply growth slowed due to high construction costs.
Domestic airlines, on the other hand, have not been able to increase fares enough despite high fuel costs because of competition from discount carriers.
The study, which tracked 329 domestic city pairs, said the annual average air fare paid for business travel had declined since the end of 2000 to a low of $216 last year. via MSNBC.com.