Business Travel Forecast 2009

"Based on foretasted economic conditions for 2009 and the substantial increase in fares already experienced in 2008, it is possible that airfares in 2009 may decrease," said Hervé Sedky, vice president and general manager, Global Advisory Services, American Express Business Travel.

Sedky continued, "Considering airfare, car rental and hotel stay, we expect the average domestic trip to increase 2.8 percent, or $31 USD, to a total of approximately $1139 USD. An increase of 4.3 percent, or approximately $147 USD, is expected for international trips to bring the average cost to $3556.

However, if you include the costs of additional travel expenses including baggage fees, dining, airport parking and even package shipping, it can add an estimated $400 to the total trip cost."

Global Airfare Forecast
The proliferation of new fees and a delicate supply and demand balancing act will determine whether airfares remain steady, increase or potentially decrease compared to 2008.

"In response to the record energy prices in 2008, many airlines began charging fees for different services such as checked luggage, in-flight refreshments and aisle seating. To help mitigate the impact of these new charges, which can increase air travel costs up to an additional15 percent per trip, we advise companies to consider increasing their focus on demand management to ensure planned trips meet the guidelines designed to promote the most effective use of their business investment," continued Sedky.

• Capacity cuts are likely to lead to a shortage of available seats at lower price points, while changes in ticketing and minimum-stay requirements, uncertainty surrounding the future price of jet fuel, movement in airline consolidation and alliances and tighter controls over contract performance measurement are likely to drive price increases.
• Prices are predicted to experience downward pressure due to a slowing global economy, improved demand management by corporations and stronger traveler compliance. The expansion of low-cost carriers, more efficient aircraft and airline operations and the continued liberalization of the industry are also expected to mitigate increases.

Global Hotel Rate Forecast
Although American Express Business Travel forecasts some rate growth in the global hotel industry, most regions will likely experience declines in occupancy, which will keep rate increases below the level of those seen in 2008.

• The record oil prices that began in 2008 are expected to continue to impact the hotel industry and airline capacity cuts should drive down demand in some markets
• As new hotels expand global supply and demand decreases in some markets, travel buyers should have increased bargaining power for 2009 rates.
• Companies should revisit their travel policies to ensure that travelers have a comprehensive guide to navigate the current travel environment.
• In addition to a tight travel policy, demand management and an increased focus on traveler compliance can deliver savings.
• Benchmarking that is based on average segment cost or average ticket price is no longer sufficient due to the expansion of airline fees. Companies should benchmark the entire cost of a trip in an effort to minimize expenditures related to business travel.

Meeting and Event Management Forecast
As economic conditions continue to draw attention to meeting and events as a source for savings, senior business leaders are expected to seek further visibility into meetings spending and aim to measure the return on investment of meetings and events for their companies.

• Effective demand management tactics and a movement toward shorter events in more local destinations should help corporations achieve the best return on investment
• Implementing and managing meetings policy is expected to provide companies the ability to drive certain cost-saving behaviors. Based on a recent survey of American Express clients, over 70 percent of companies do not have a stand alone meetings policy
• Technology developments offer cost-effective ways to supplement meetings and events schedules. Teleconferencing and social networking sites are gaining popularity as tools to strengthen the interpersonal relationships created through traditional meetings.
• Leveraging transient hotel programs with a meetings hotel program is expected to enable companies to have visibility in both areas and drive savings. Negotiating packages for the preferred properties will likely simplify the process to drive and support compliance.

(Source: American Express Business Travel)

Cost Containment Strategies for 2009
Companies across the globe are seeking new ways to manage their travel investments and maximize the value of their T&E programs.

Travel reviews by JD Power and IBM

Hotels

Hospitality Industry Confronts Impact of Economic Downturn
Occupancy and revPAR levels for U.S. hotels continue to decline through the first week of November (latest available data) though ten top markets posted brisk growth in occupancy levels, room rates and revPAR through October.

Hotels in the United Kingdom as well as in Europe overall registered revPAR declines based on sliding occupancy levels.

The hotel construction pipeline grew 28% worldwide at the mid-year point (latest available data) although signs point to a developing fall-off and in the U.S., the number of guestrooms under
construction decreased by 5% in October.
Car Rental
Car Rental Customer Satisfaction Continues to Decline Customer satisfaction with renting cars at airports has declined considerably for a second consecutive year, according to the J.D. Power and Associates 2008 Rental Car Satisfaction Study.

The study looks at six factors: costs and fees, pick-up process, rental car, return process, reservation process and shuttle bus/van.

Overall satisfaction declines significantly from 750 points on a 1,000-point scale in 2007 to 734 in 2008. Staffing and operational cuts are hurting service, according to the study. Enterprise ranked highest for the fifth year in a row, followed by Hertz and Alamo. (Source: J.D. Power press release).

Avis Budget Ups Rates $3 Per Day
Avis Budget Group said it is upping its retail car rental rates by $3 per day and $20 per week at all airport and selected off-airport locations.

The company said the rate increase was a response to escalating costs affecting the car rental industry. Hertz raised its rates in the U.S. and Europe at the end of October. (Source: Avis Budget Press release)

High Lights

Airline baggage fees bug air travelers the most, but many consider general cabin ticket prices and fuel surcharge reasonable, according to a survey by the IBM Institute of Business Value.

• Seventy-eight percent of travelers consider airline baggage fees the biggest rip-off.
• Seventy-six percent considered additional charges to redeem miles another major rip-off.
• But 70 percent called general cabin ticket prices reasonable.
• Half considered fuel surcharges valid.
• Fifty-eight percent prefer to pay the lowest possible ticket price, sacrificing all amenities, including food.

(Source: IBM press release)

Washington eases passport rule for summer

Washington “For U.S. citizens traveling to Canada, Mexico, the Caribbean, and Bermuda who have applied for but not yet received passports can nevertheless temporarily enter and depart from the United States by air with a government issued photo identification and Department of State official proof of application for a passport through September 30, 2007. “

Officials said the “record-breaking demand” at passport offices had led to excessive delays of up to three months.
The revised procedures will remain in place until 30 September.

The federal government is making this accommodation for air travel due to longer than expected processing times for passport applications in the face of record-breaking demand.

Between March and May this year, the State Department issued more than 4.5 million passports.

Washington says extra staff had been recruited to deal with the surge in demand, toll-free phone lines have reportedly been overloaded and passport offices swamped by desperate applicants who have been waiting for months.

Be perpared for Passport Delays

With the new travel requirements of the Western Hemisphere Travel Initiative; routine service for passports (usually received within six weeks) is now taking up to 10 weeks.

The government´s expediting service, which costs $60 extra and usually takes up to two weeks is now taking three to four weeks and possibly longer if the traveler renews by mail. For updates on passport delays, visit www.travel.state.gov/passport.

If you are even considering any travel by plane outside of the United States, it´s imperative to apply for a passport or renewal immediately!

Did You Know That…. 1st Qtr 2007

Beginning January 23, 2007, ALL persons, including U.S. citizens, traveling by air between the United States and Canada, Mexico, Central and South Americas, the Caribbean and Bermuda will be required to present a (1 from the list):

• valid passport
• Air NEXUS card
• U.S. Coast Guard Merchant Mariner Document
• an Alien Registration Card, Form I-551, if applicable

As early as January 1, 2008, ALL persons, including U.S. citizens, traveling between the U.S. and Canada, Mexico, Central and South America, the Caribbean and Bermuda by land or sea (including ferries), may be required to present a valid passport or other document as determined by the Department of Homeland Security.

While recent legislative changes permit a later deadline, the Departments of State and Homeland Security are working to meet all requirements as soon as possible.

Ample advance notice will be provided to enable the public to obtain passports or passport cards for land/sea entries.

The passport requirement does NOT apply to U.S. citizens traveling to or returning directly from a U.S. territory. U.S. citizens returning directly from a U.S. territory are not considered to have left the United States and do not need to present a passport. U.S. territories include the following:

• Guam
• Puerto Rico
• the U.S. Virgin Islands
• American Samoa
• Swains Island,
• and the Commonwealth of the Northern Mariana Islands.

The cost of a new passport for an adult is $97, and for children $82.

Atlanta Hartsfield-Jackson

reduced flight delays when it opened its fifth runway in May 2006. That’s significant, considering it’s the world’s largest airport with more than 85 million people flying in and out every year.

The new $1.1 billion, 9,000-foot runway has increased by about 30% the number of arrivals the airport can handle at any time, reducing passenger wait time as they taxi or circle in the air.

Atlanta Hartsfield-Jackson joins Chicago O’Hare, Denver and Dallas-Fort Worth as the only airports in the U.S. where three jetliners are able to land safely at the same moment.

In all, the average per-flight delay will be nearly halved to about eight minutes, the airport says. The runway will also cut through the nation’s air traffic congestion.

The IRS

The Internal Revenue Service issued a 2007 allowable vehicle reimbursement rate of 48.5 cents per mile, despite a moderation in gas prices compared with the volatile post-Hurricane Katrina prices last autumn.

The 2007 rate is an increase from the 2006 rate of 44.5 cents per mile. It also is back on the same level as the rate enacted in September 2005, a rare midyear adjustment to accommodate for the surging fuel costs following Katrina.

The higher rate this year stems from overall higher prices for vehicles and fuel for the year ending in October, according to the IRS. Not counting the drop in 2006, following the post-Katrina adjustment, IRS mileage rates have climbed continually during the past few years. The rate was 40.5 cents per mile in 2005 and was 37.5 cents in 2004.

Although it is not mandatory for companies to follow the IRS safe-harbor rate, most use it as guidance for reimbursement of employees using personal vehicles for business travel.

More than 80 percent of 171 respondents in Business Travel News’ third annual Expense Managers Survey said they used the 2006 rate of 44.5 cents for reimbursement.

Trusted Traveler Program: January 2007

U.S. Customs Expands Trusted Traveler Program
U.S. Customs and Border Protection is expanding NEXUS trusted traveler-crossing privileges to all land, marine and air points of entry where NEXUS locations are currently in place.

In addition, NEXUS will provide processing locations at additional airports in Canada throughout 2007.

NEXUS is a joint program with the Canada Border Services Agency that allows pre-screened and approved travelers faster processing at designated highway lanes in high-volume border crossing locations, at a NEXUS kiosk at Vancouver International Airport, and at certain marine reporting locations in the Great Lakes and Seattle regions.

NEXUS membership also fulfills the travel document requirements of the Western Hemisphere Travel Initiative, which will require a passport or other secure travel document by all U.S. and Canadian citizens seeking entry or re- entry into the U.S. by air beginning January 23, 2007.

It is anticipated that NEXUS membership also will be acceptable when the requirement is extended to land and sea travel.

(Source: U.S. Customs and Border Protection).

 

Passport Information Fall 2006

Travelers entering the U.S. by land from Mexico and Canada won’t need to show a passport (or “PASS” card) until June 2009.

House and Senate lawmakers agreed to push back the program by 17 months to allow time to design the PASS card and develop the technology and security standards associated with it. The PASS card will be a less expensive alternative to a passport.

Those crossing the borders into the U.S. now only need a photo ID, such as a driver’s license, and a birth certificate. This delay only applies to travelers entering the U.S. via land borders; people coming into the country by airplane or cruise ship will still have to show their passports to customs officials as of January 8, 2007.

Cruise passengers who are departing from and returning to the U.S. from a domestic port (MIA, LAX, NYC, etc) do not need a passport by January 2007.

Our Jacksonville office in the News

Jacksonville-Mandarin County Chili Cook-off

This is the 12th Annual Mandarin Chili cook off and this year it will benefit:
Junior Achievement
Cooking Up Partnerships for the Next Generation.

Various items also will be up for raffle and silent auction, including two round-trip airline tickets to anywhere in the continental United States, which are donated by our Williamsburg Travel-American Express Jacksonville office.

Again this year, there will be a children’s Space Walk provided by SpaceWalk of Jacksonville, Southpaw from the Jacksonville Suns; Sweet Cheeks the clown offering face painting; live musical entertainment from Larry Mangum’s TLC Band; and, of course, lots of chili, hot dogs and soft drinks.

More than 1,000 people attended the cook-off last year.

Chili will be judged using a double blind method to ensure impartiality among contestants.

Other sponsors for the cook-off include JP Perry Insurance, Mandarin NewsLine, Nimnicht Cadillac, Stonewood Grill & Tavern, Jennifer Hayes, New Plan, Mortgage Consultant with SunTrust Mortgage and Vystar Credit Union. Secondary sponsors include Kelly Services, Medical Instrumentation Repair, Cravey Communications Inc., Robert W. Burke, CPA, Julington Creek Animal Hospital and NetBank.

Please contact our Jacksonville office for more information.

Passport updates

Summer News Letter, part 1

Beginning January 1, 2007 all travelers to and from North and South America,the Caribbean and Bermuda will be required to have a valid passport or other accepted document that establishes the bearer’s identity and nationality to enter or re-enter the United States. This includes U.S. Citizens.

This means you will no longer be able to use a birth certificate as proof of citizenship when traveling to Mexico, Bermuda, the Caribbean, Central America, etc. This applies to travel by air or cruise ship.

If you are flying or cruising for the holidays and will return to the U.S. after 12/31/06, you will need a passport.

For more information about applying for a passport, U.S. citizens may visit travel.state.gov or call the National Passport Information Center toll free at 1-877-4USA-PPT or TDD/TYY: 1-888-874-7793.
Foreign nationals should contact their respective governments to obtain passports. Beat the rush and apply now! Passports are valid for 10 years.