Business Travel Tight This Year

Business Travel Tight This Year

14-10-2009

A survey of members by the Association of Corporate Travel Executives underscores the caution prevalent in the industry. Only a quarter of respondents said they will spend more on corporate travel next year, while about half will operate at 2009 levels.

The outlook:

Airlines

Airlines, with their ability to quickly add or remove seats, could be on the cusp of a slow recovery. American Express Travel estimates domestic fares in North America will grow 2% to 7% next year. Business-class fares will grow 1% to 6%.

Low-cost carriers already are seeing more travelers. JetBlue's September traffic was up 10% from a year earlier as it, unlike other airlines, added capacity. Southwest's traffic rose 9% in September, and the percentage of seats filled reached nearly 75% vs. 63.4% a year ago.

Hotels

It's been an ugly year for hotels. In the second quarter, revenue per available room, the industry benchmark of measuring performance, fell 19.5% from a year ago, says Smith Travel Research.

The decline will continue for much of 2010, analysts say. Room rates will fall 1% to 6% in North American hotels, and upscale properties will offer deeper price cuts, American Express says.