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20 September 2013 | Marino Donati
Demand for business travel is expected to rise next year as the global economy picks up.
Advito's 2014 Industry Forecast for Business Travel also said corporate travel demand grew more slowly than expected in 2013, which would make suppliers cautious about pushing up fares.
Overall price increases in the air, hotel and car sectors should be in line with inflation at most, it said. Travel buyers for trips across the Atlantic and to Asia Pacific may find attractive negotiating opportunities, the report concluded.
Airlines in the US and Europe are keeping a firm grip on capacity, so soft demand is likely to prevent significant fare hikes.
However, recent carrier consolidation in Latin America and strong demand, driven by a surging Brazil, is predicted to drive up air fares by 2-3 per cent. Over capacity with Gulf carriers could drive down prices on traffic between Africa, Europe, and Asia Pacific.
Hotels are set to raise corporate rates by 4-6 per cent for next year. New York and Hong Kong will have double-digit increases, as will under-supplied emerging destinations like Sao Paolo and Luanda. But smaller cities offer better negotiating opportunities for buyers, the report predicts.
Buyers should decide on meeting venues quickly, as availability is becoming more of an issue with booking lead times continuing to shrink.
Intense competition among big suppliers should continue to keep corporate car rental rates at or below 4 per cent.
☛ Business travel's impact on the economy will be among the topics under discussion at the CIPS Annual Conference on 10 October in London