2010 Business Travel Forecast

Business travel forcast 2010

Following this weakened demand in 2009, American Express Business Travel expects a pent up need for travel and meetings to be unleashed in 2010. Fuel prices, along with sustained signs of a restarting economy, could also generate slight up-ticks in travel category prices worldwide, particularly in Asia Pacific.

"As the world begins to show signs of emerging from the recession, businesses are adapting to a fundamental shift in thinking focused on proving the value of travel and every employee connection," said Hervé Sedky, vice president and general manager, American Express Business Travel. "Heading into 2010, companies will need to consider the impact of these changes in mindset, particularly as projected rate increases in key travel categories gain momentum."

North America – Air - Hotel - Car Forecast and Trends

Overall, business travel growth is predicted to be up one percent for the U.S. and 15 percent for Canada in 2010. Airline routes and capacity reductions made in the region in an effort to equalize the decrease in demand in 2009 are expected to force prices up in North America in 2010, higher than most other global regions. Hotel rates are expected to remain on the decline in North America as a whole as hoteliers fight to attract both business and consumer travelers back. Car rental rates will likely increase slightly as the cost of vehicles is expected to rise following decreases in capacity in 2009 and car manufacturing consolidation driving up the cost of replacing relatively old fleets.

Europe – Air Hotel Car Forecast and Trends

As companies looked for ways to curb travel costs, many companies in Europe trading down from traditional airlines to low cost carriers. Overall airlines in Europe saw declines in volume and while demand is expected to grow in 2010, fares are expected to decline in the first half of the year as airlines compete for market-share. While hotel rate changes will likely vary by country, it is expected that rates will only increase modestly at best in Europe in 2010. Opposite the trend in the U.S. to unbundle services however, European hotels are giving travelers additional amenities as a means to attract their business and loyalty and retain price levels.

Latin America & Air Hotel Forecast and Trends

In Latin America there has been upward pressure on rates as some carriers reduced the number and size of aircrafts servicing some routes and consolidated others. Increases that may have been possible through these measures are challenged, though, as capacity at less expensive airports increased, online travel agencies entered the market, and business travelers increased usage of car rental or bus. This will likely continue to have an impact in 2010, with projected airfare changes ranging from negative three percent up to two percent. Hotel rates are expected to continue to decline, similar to North America hotels having a more difficult time with managing capacity. “The 2010 Forecast clearly underscores that the complexity of managing business travel and understanding the underlying dynamics of the industry and supply base only becomes more challenging as economic conditions change and business opportunity is global,” said Christa Degnan Manning, director, eXpert insights research for American Express Business Travel Global Advisory Services. The forecasts and projections provided in this report are based on information gathered from American Express 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.
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Airlines and Security Updates for May

Air Travel Demand Falls Fifth Month in a Row
The Air Transport Association of America reported that passenger revenue fell 23 percent in March 2009 versus the same month in 2008 – the fifth consecutive month in which passenger revenue has fallen from the prior year.

March passenger traffic on U.S. airlines fell by 10 percent, while the overall cost to fly one mile fell by 13 percent. Declines extended beyond the mainland United States to transatlantic, transpacific and Latin markets. (Source: Air Transport Association press release).

Airlines Cut Fares
JetBlue Airways trimmed $100 off some of its nonrefundable fares. Air France introduced a lower priced business “leisure” fare for the summer and Continental Airlines cut BusinessFirst fares to Asia. JetBlue dropped nonrefundable fares from $599 to $499 on 24 of its transcontinental routes.

Air France is offering a 60-day advance purchase business fare to 25 popular destinations in Europe and the Middle East. Sample roundtrip fares: New York-Paris, $2,222, Houston-Madrid, $2,622 and Chicago-Zurich, $2,458. Continental is now offering fares from the New York area to Shanghai, Beijing, Hong Kong and Tokyo starting at $3,076. (Source: Air France, Continental, JetBlue press releases).

Delta, Northwest Merge Frequent Flyer Programs in SkyMiles Card

American Express has launched a marketing campaign to build awareness for the SkyMiles cards in key Delta hubs that were formerly Northwest hubs within the U.S. including Detroit, Minneapolis/St. Paul and Memphis.

The Northwest WorldPerks and Delta SkyMiles frequent flyer programs are merging, but Northwest members will have to apply for a Delta SkyMiles Credit Card from American Express to continue earning miles both from credit card purchases and from flying. American Express is expanding benefits in the program, so that card members can earn and redeem miles in more ways and places, including the ability to earn double miles on all Delta and Northwest operated flights.

Gold and Platinum Delta SkyMiles Credit card members and Delta Reserve card members, who now earn Double Miles on virtually every dollar of spend with Delta, can also earn Double Miles on all purchases made with Delta’s wholly-owned subsidiary, Northwest.

The Pay with Miles feature, which currently allows Gold, Platinum and Reserve card members to book Delta flights with no black-out dates or inventory restrictions on delta.com, will also be expanded to all Northwest-operated flights. (Source: American Express press release).

Corporate America Curtails Travel to Mexico
Forty-seven percent of members of the Association of Corporate Travel Executives (ACTE) responding to a survey of the impact of the swine flu on their company’s travel said that their companies have restricted business travel to Mexico.

Three percent have restricted travel to the U.S. and Mexico, while 7 percent are restricting travel to any country with reported cases of H1N1 swine influenza. One percent reported restricting travel to the U.S. only. Forty-two percent are claiming no travel restrictions at all. Excluding travel to Mexico, only 11 percent of respondents cited travel restrictions.

Meanwhile, the International Air Transport Association said airlines were prepared for dealing with swine flu, saying IATA has worked with WHO to prepare guidance materials for front-line staff at airlines, including cabin crew, maintenance workers, cleaners, passenger agents and cargo/baggage handlers. WHO advises there should be no restriction of regular travel or closure of borders.

It is considered prudent for people who are ill to delay international travel and for people developing symptoms following international travel to seek medical attention, in line with guidance from national authorities. (Source: ACTE, IATA press releases).

Security

Customs Deactivates Older NEXUS Cards
U.S. Customs and Border Protection canceled old NEXUS cards for current NEXUS members on May 1. CBP has been mailing new NEXUS cards, a card that simplifies border crossing for pre-approved, low-risk travelers, to all members since November. The new cards have enhanced security features and allow U.S. and Canadian citizen cardholders to comply with the documentary requirements of the Western Hemisphere Travel Initiative.

All members must activate their new cards within 30 days, verify and update their U.S. mailing address by going to https://goes-app.cbp.dhs.gov/.
NEXUS members should destroy their old cards after activating their new ones.
(Source: Customs press release).

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Hotels and Car Rentals

Riu Resort Cancun Mexico
Hotel Occupancy Rates Drop, Putting Pressure on Room rates
There’s more room at the inn for U.S. travelers, with the U.S. hotel industry finishing 2009 with an occupancy rate that was 4.2 percent lower than at the end of 2007, according to hotel consulting company STR.

The industry saw a decent start to the year, but became extremely negative during the past four months. Although occupancies fell, average daily room rtes actually increased by 2.4 percent. STR says the hotel industry will stay at this level for the next few months, but will see some improvements in the second half of the year.

Only two cities saw occupancy go up—New Orleans (8.6 percent) and Houston (2.6 percent). Rates actually went up in many major cities, including Houston (9.4 percent), Denver (6.3 percent), San Francisco (5.4 percent). Ultimately, however, declining occupancies are going to put considerable pressure on hotels to lower their room rates, according to Lodging Econometrics, which covers hotels.
(Source: STR Global press, Lodging Econometrics press release)
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Starwood, Hilton Add Bonuses to Loyalty Programs
Starwood is celebrating the tenth anniversary of its Starwood Preferred Guest
program and Hilton is kicking off the 22nd year of Hilton’s HHonors loyalty program. Both are offering bonuses until spring. Starwood is offering members 10,000 bonus Starpoints for every 10 nights stayed now through April 30. Hilton HHonors, whose members can earn points and miles for the same say is offering double base points at the more than 2,400 participating Hilton family hotels through April 6. Register for the program at HiltonHHonors.com/globaldoublepoints.com
(Source: Hilton, Starwood press releases).

Car Rental Avis Budget Introduces Satellite TV in cars You can keep backseat drivers occupied with ATT CruiseCast, a new satellite television service that brings news, family, sports, comedy and music channels to the back seat of your car. Starting later this year, the service will cost $8.95 per day or $62.65 per week. It stores p to there minutes of content so obstructions such as overpasses or tall buildings will not interrupt a program. Channels include MSNBC, CNN Mobile Live, the Disney Channel, Comedy Central and many others.
(Source: Avis Budget press release)
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Expense Management in Tough Times

A recent American Express study of Fortune 500 companies and their expense management practices found one of the most effective strategies—and the least expensive to implement—was holding employees accountable for their corporate spending. There were three simple ways,

  1. Communicate: make sure employees know what a company’s spending policies are.
  2. Educate: tell employees the financial implications, for both employees and the company, for disregarding those policies.
  3. Enforce: offer carrots and sticks to encourage employees to adhere to policy.

Source: American Express press release

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Business Travel Forecast 2009

The beach from the House, Barbados

"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.

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Hotels and Car Rental Updates for Oct 2008

Hotels

Choice Hotels, American Express Offer
Double Rewards for European Stays

Members of Choice Privileges, Choice Hotels International’s loyalty program who use their American Express card when they stay at Choice Hotels International in Europe will earn 10 bonus points per $1 spent, in addition to the base 10 points (a total of 20 points per $1 spent).

The offer is good through Nov. 30 and includes Comfort, Quality and Clarion brand hotels. Travelers can register at choicehotels.com/axp. (Source: Choice press release).

Car and Rail

Dollar, Thrifty Offer American Express
Cardholders Special Rates in Florida

Dollar Rent A Car and Thrifty Car Rental, are including Pass24 Prepaid Toll Service with select car rental rates at participating Florida locations when customers use any American Express Card with Promo Code AX13.

This offer is valid at participating location in Florida through Dec. 15. Ordinarily, Pass24 pre-paid toll service costs $5.95 per day or $27.95 per week in Florida.

Enterprise Makes Car Sharing
Program Available Nationwide

WeCar, Enterprise Rent-A-Car’s business-to-business sharing program, is now available nationwide.

It provides hourly car rentals for corporate campuses, government installations, and colleges and universities. After enrolling in the program, members can reserve a vehicle online for all transportation needs, 24 hours a day, seven days a week.

The cars are strategically placed in designated, easy-to-find parking spaces. (Source: Enterprise press release).

You and your PDA

Eighty-seven percent of workplace professionals take their PDAs to bed, according to a work-life study commissioned by Sheraton Hotels & Resorts, but believe it enables them to spend more time away from the office and with family and friends. lounge. lounge. (Source: Sheraton press release)

  1. 85 percent say technology makes them feel compelled to be connected to work 24/7
  2. 84% check their PDA-s just before going to bed and as soon as they wake up.
  3. 85% say that PDAs and cell phones let them spend more time out of the office
  4. 84% say it gives them more quality time and flexibility with family and friends

Sheraton commissioned the study as part of its launch of its “Link-Sheraton experienced with Microsoft,” lobby lounge that helps travelers stay connected on the road. (Source: Sheraton press release).

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Hotel Car & Record Airfare Updates for Sept 2008

Hotels
Sheraton Opens at JFK
The Sheraton JFK Hotel, a new build, has opened at New York´s John F. Kennedy International Airport. The 150-room hotel is a full-service hotel with meeting facilities, complimentary shuttle service to and from the airport, a restaurant, indoor pool, business center, fitness center and Club floor. (Source: Starwood Hotels Resorts press release).

Marriott Raleigh City Center Opens The 400-room Raleigh Marriott City Center has opened next to the new 500,000-square-foot Raleigh Convention Center. The 16-story hotel is attached to the convention center and has more than 15,000 square feet of meeting space, a business center, swimming pool and fitness center. It has two Italian restaurants and a 1,400 square foot Starbucks. (Source: Marriott press release).
Cars
Avis and Budget Offer Flicks to Go
Avis Rent A Car and Budget Rent A Car are introducing Flicks-To-Go, portable DVD players that attach
to the back of a car’s headrest. They include a choice of speakers for multiple viewers or two high-quality headphones which customers can keep. (Source: Avis press release).
Record Airfares
If it feels as though you’re paying more for airfare, there´s a reason. The latest American Express Business Travel Monitor reports that domestic and international airfares hit record levels in the second quarter of 2008. The good new is that companies can save money by emphasizing travel policy compliance.

Among the study’s findings:

  • The average one-way domestic fare was $260, up $24 from the same period last year, a 10 percent increase, and up $27 from the first quarter, a 12 percent increase.
  • The average one-way international fare hit its highest level since the inception of the Business Travel Monitor in 1999. These fares increased 11 percent over the same period last year, averaging $1,080.
  • The percentage of international business class tickets dropped to their lowest level since 2004. Increases in the percentage of tickets purchased for the back of the plane indicate that travelers are trading down.

(Source: American Express press release).

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June Footnotes for Hotels & Car Rentals

Hotels

Italy view

Loews Hotels Introduces Baggage Buy Back Program

In the wake of American Airlines’ new $15 fee for checking bags, , Loews Hotels has introduced a new “Baggage Buy Back” incentive that will reimburse guests for their $15 checked baggage fee.

Arriving guests simply present any airline bag fee receipt at the front desk to receive the rebate, which will be issued in the form of a credit to their bill at checkout. The Baggage Buy Back rebate is available at Loews’ 18 properties in the U.S. and Canada, from June 15 through Labor Day, Sept. 1.

Loews Hotels will offer credit for up to two bags for a maximum of $30 per occupied room per stay. (Source: Loews press release).

Cars

Airline Loyalty Programs Offering Savings, Bonus Miles to Car Renters Airlines are giving their frequent flyer members a chance to earn more miles or get discounts when they rent cars.

Delta Air Lines and Advantage Rent A Car are partnering to allow SkyMiles members
to earn 200 miles per day on any class of vehicle rental through Advantage. with a maximum of 2,000 miles per rental. Additionally, SkyMiles members may earn up to 6,000 miles for rentals completed through July 13.

Northwest Airlines is partnering with Hertz to allow WorldPerks members to save 50 percent and earning double miles on weekend rentals in the U.S., Canada and Puerto Rico through June 30. WorldPerks members can earn 50 WorldPerks miles per day for Hertz rentals of one to four days, and 500 WorldPerks miles for Hertz rentals of five days or more.(Source: Advantage, Northwest press releases).

Spotlight On…..What You Really Dislike About Flying

It’s not the individual airlines that so frustrate air travelers, according to a new Travel Industry Association survey of air travelers. What irritates you most is the air travel process.

The TIA survey of more than 1,000 air travelers found that the more you fly, the more frustrated you get.

  • Seventy-eight percent of air travelers believe the air travel system is either broken or in need of moderate correction
  • Sixty-two percent believe the air travel system is deteriorating
  • Thirty-three percent of air travelers are dissatisfied with the air travel system and 48 percent of frequent air travelers (those who do five trips or more per year) are dissatisfied
  • Thirty-nine percent feel their time is not respected in the air travel process and that increases to 51 percent among frequent travelers.

The TIA is blaming flight delays caused by an outdated air traffic control system as a fundamental cause of the aviation industry’s problems and is holding a summit later this money to push Congress to address the problem.

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June Footnotes for Airlines

Airlines Up Fares Again for 16th Time This Year
Airlines continued to increase fares and search for new revenue streams to help them cope with soaring fuel prices.

United Airlines initiated what was the 16th fare hike to stick since the beginning of the year, with fare increases that ranged from $10 to $60, depending on the route. Other legacy carriers—Continental Airlines, US Airways and Northwest matched.

American Airlines upped some fares and other carriers tacked on increases as well.

Rick Seaney, CEO of FareCompare.com, an airline comparison website, said that airlines have no choice but to pass on the cost of fuel to consumers and when passengers do begin to push back in significant numbers the airlines have no choice but slash capacity by that same amount. (Source: FareCompare.com.)

American Cuts Flights, Staff, Charges for First Checked Bag, Ups Other
Fees

American Airlines said it would charge its passengers $15 for their first checked bag as well as cut domestic flights by 11 to 12 percent as part of its efforts to cope with fuel costs.

At press time, no other carrier had followed American’s lead in charging for the first checked bag; Southwest Airlines, in fact, pointedly stated that it continues to let its customers check two bags—for free.

American, meanwhile, upped other fees, including those for oversized bags (from $100 to $15); ticket change fees from $100 to $150 for domestic tickets and from $100 to $200 to $150 to $250 for international tickets. It also upped its reservation service fee and AAdvantage Award ticket fees up by $5 each to $20. US Airways took another tactic—it said it would eliminate free snacks, although it will continue to serve free soft drinks.

And Midwest Airlines said it would begin charging $20 to check a second bag.
(Source: American, Southwest, Midwest Airlines press releases).

Major Carriers Continue to Experiment With All-Business Class Flights
The number of air travelers flying first or business class is dropping at increasingly faster rates, according to the International Air Transport Association, an industry group.
And three transatlantic carriers that offered premium seating—MAXJet, Eos and Silverjet—have ceased flying. But major carriers continue to experiment with the oncept. Singapore Airlines has introduced all-business class flights between New York and Singapore.

In October, Lufthansa will introduce all-business class service between Boston and Munich. That’s in addition to the all-business class service it operates between Chicago and Düsseldorf, Newark and Düsseldorf and Frankfurt and Düsseldorf.

Meanwhile, on June 19, OpenSkies, a British Airways-backed carrier that has three classes of service but has allocated nearly two-thirds of the plane to premium seats, will begin to fly between New York and Paris. And L’Avion, the all-business class French carrier, is now code sharing with OpenSkies to offer three flights daily between Paris and JFK (Sources: IATA, Singapore Airlines, Lufthansa, OpenSkies and L’Avion press releases.)

Network Carriers Add International Flights, Low Cost Carriers Add
Domestic

Some U.S. carriers are adding flights, many focusing on international routes. Northwest Airlines has begun flying between Memphis and Columbia, Mo., and began serving Taipei via Tokyo. Delta Air Lines began flying from New York to Georgetown, Guyana and will start flight from Atlanta to Kuwait in November.

On the domestic front, JetBlue has begun daily service from Boston’s Logan International Airport to Chicago O’Hare and New Orleans. Southwest Airlines is adding flights from Denver to San Francisco and from Denver to Omaha in September.
(Source: Northwest, Delta, JetBlue and Southwest press releases).

New Virgin Atlantic Boston Clubhouse
At last, it’s here – the new Boston Clubhouse has opened its doors and is now accepting Upper Class flyers and Flying Club Gold members for some preflight rest, relaxation and pampering. Boston Clubhouse features a deli counter and bar, dedicated business area with PCs, free WiFi connection, charging facility for mobiles and blackberries, dining, lounge seating, free newspapers and magazines.

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Hotel Information May 2008

Avenue Hotel Opens in Chicago
The Avenue, a contemporary, post-modern hotel, has opened just a half block east of Chicago´s Michigan Avenue.

Garden dining in Rome

It has 150 one-bedroom and junior suites and 200 guest rooms. It has Special Tech rooms with iMac, dedicated T-1 Internet connection and color printer for business travelers and kid-friendly rooms with games and child-oriented décor.

It has more than 18,000 square feet of meeting space. It also has Stay for the Cure packages; ten percent of proceeds go to the Chicago Affiliate of Susan G. Komen for the Cure and an Eco Avenue program supporting environmental and conservation initiatives. (Source: Avenue press release).

Aloft Hotel to Open at Dulles Next Spring
Starwood Hotels & Resorts has broken ground on the aloft Dulles South, which will open near Dulles International Airport next spring. It will be in the heart of the technology corridor and close to corporate offices in aerospace, technology and telecommunications as well as Westfields business park.

Aloft hotel rooms have loft-like, nine-foot ceilings, over sized windows, wireless internet, one-stop connectivity solutions for multiple electronics including PDAs, cell phones, mp3 players and laptops. (Source: Starwood press release).

What You Paid to Travel in 2007

American Express has analyzed North America-based domestic and international air, hotel and car rental rates for 2007 and found that international rates saw increases across the board, while domestic fares and rates were stable.

  • Average international fares increased a record 8 percent
  • Since 2004, the average international airfare has increased by 21 percent
  • Domestic fares stabilized-but that was after a 7 percent jump from 2005 to 2006
  • The expansion of low fare carriers and passengers booking farther in advance helped domestic fares
  • International hotel rates increased, domestic rates flattened
  • Car rental rates increased 4.4 percent-firms re dealing with high operating costs

Companies can achieve savings in this kind of environment with a well-managed, dynamic travel program and by clearly communicating policy changes with travelers, according to Hervé Sedky, vice president and general manager for American Express Business Travel. (Source: American Express)

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