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January 09, 2019
Demand for Business Travel Remains Strong
Travel Leaders Corporate revealed Q3 business travel data related to hotel rates, airline advanced purchaseTravel Leaders Corporate, an award-winning leader in business travel, has released an analysis of its clientsÕ aggregate business travel bookings from the third quarter of 2018. Data shows that the cost of business trips are continuing to rise, however, Travel Leaders Corporate clients show no slowdown in travel.
and rental car rates, in addition to trip costs
Domestically, the total cost of a business trip is at a record high of $1,073, a four percent increase from Q2 and an eight percent increase from Q3 2017. Looking at trip components, the data shows that rising hotel costs are driving this increase. Quarter over quarter, there is a 12 percent increase in the total hotel cost of a business trip, and year over year there is a 16 percent increase. On the international front, hotel costs have also risen (13 percent since Q2 and 27 percent since Q3 2017 due to an increase in trip length).
ÒWe are fortunate to be experiencing a strong environment for corporate travel,Ó commented Mike Boult, Senior Vice President of Corporate Sales at Travel Leaders Corporate. ÒThe implications of this are a double-edged sword. There is strong demand for corporate travel in almost all sectors, but a healthy economy also means that suppliers can and are raising prices. Given the current environment, it is even more important for companies to consider a travel management partner not only for their greater buying power, but also for duty of care, travel spend management and overall traveler satisfaction.Ó
In addition to hotel costs, two other factors make up the overall cost of a business trip Ñ airfare and car rental. The United States continues a trend of lowering car rental rates, with this quarter hitting a record low car rental trip cost of $143 (down from a record high of $165 in Q3 2017). Airfare is flat from the last quarter, but up six percent from this time last year. Outside of the United States, car rental rates are more even, with airfares rising three percent from the last quarter.
ÒAn interesting trend comes from greater airline competition between legacy carriers and newer, lower-priced airlines,Ó Boult commented. ÒYears of careful analysis on the part of legacy carriers has revealed the need to break each plane into multiple micro zones to negate pricing risk. By offering numerous classes of service, including everything from business class to basic economy, legacy carriers are better able to compete with newer airlines with their breadth of service offerings. Similarly, in the hotel sector, we are seeing more and more consolidation. Along with that comes better data and an ability for hotel partners to match the right hotel for each business traveler.Ó
Travel Leaders Corporate also tracks hotel and car rental prices in the top 25 U.S. cities. The current national average for a one-night hotel stay is $164. The top 25 markets are nearly evenly split between running above the national average (13 cities) or at or below (12 cities). In the third quarter of 2018, cities in the northern part of the United States tended to maintain a higher than average price. Based on past data trends, many southern cities are expected to rebound in hotel prices in Q1 2019.
Other key findings:
Airline Advanced Purchase: Travel Leaders CorporateÕs third quarter data indicates that corporate travelers are taking advantage of the lower prices found with booking airline tickets early. The largest group of travelersÑ30 percentÑbooked their flights at least 21 days in advance of their trip, averaging a cost of $441. However, travelers booking 14 to 20 days in advance of their trip saved the most money out of all groups: $394 compared to $532 for zero to six days in advance. The data may be viewed here.
Rental Cars: Despite the average total trip cost for car rentals falling, the average daily rate for car rentals nationally rose nine percent. The data may be viewed here.
Trip Costs: Travel Leaders Corporate data on airline advanced purchases, and domestic and international unit and trip costs from air, car and hotel can be viewed here.
Hotel Rates: Travel Leaders Corporate data on the average nightly hotel rate in the top 25 U.S. markets can be viewed here. Data on the average daily car rental rate in the top 25 U.S. cities can be viewed here.
ÒIndicators are pointing to continued growth in corporate travel,Ó said Gabe Rizzi, President of Travel Leaders Corporate. ÒCorporate travel is a complex subject though, and itÕs important to keep an eye on how costs are trending. We closely monitor the trends to help our clients anticipate future costs and manage their travel spend as effectively as possible.Ó
Copyright 2019 Travel Leaders Corporate. All rights reserved. From http://travelleaderscorporate.com.
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