Business Travel: Shift from Buyers to Suppliers Market

Price increases are holding steady as business travel continues to rebound, according to data released by American Express Business Travel (AEBT) from its 2010 third quarter Business Travel Monitor (BTM) North America.

Notably, data from the third-quarter BTM reveals pricing power is shifting into the hands of suppliers as both international and domestic airfares and domestic hotel rates increased in year-over-year in the third quarter of 2010.

The report also identified U.S. cities with the highest hotel rate increases (year-over-year), which include New York City, New Orleans, Washington D.C., Las Vegas, and San Francisco. New York saw a 10 percent increase while other cities saw increases in the 4-to-5 percent range.

“During the past quarter we’ve witnessed a distinct shift from a buyers’ market to a suppliers’ market leading to higher prices across several travel categories including airfare and hotel rates,” said Christa Degnan Manning, director, eXpert insights research, Global Advisory Services, American Express Business Travel.

“Airlines have been especially successful in constraining capacity and increasing fares to create more sustainable financial stability. This should prompt companies to revise travel cost-control tactics, identify new opportunities for travel return on investment, and ultimately change traveler behavior in response to the new increased price environment,” AEBT said.



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