Carlson Wagonlit Travel North America has released its clients forecasted 2011 pricing and rate information for air travel, hotel stays, use of ground transportation and meeting and event spending in North America. CWT anticipates a number of suppliers will successfully implement price increases next year, indicating overall increases in business travel demand as economic conditions in North America continue to improve.
CWT forecasts North American economy airline pricing will increase 3-5%, first and business class pricing will decrease 2-7%. Meanwhile, international economy and business classes are each expected to increase 3-5%, and international first class should increase by 4-6%. Factors impacting overall air pricing in 2011 include higher demand for travel, increases in crude oil prices, capacity reductions of 2% in the U.S. and 1% internationally compared to 2010, and limited availability of highly discounted fares.
Average daily hotel rates are forecast to increase 6.4-7.4% in the U.S. and 4.7-5.4% in Canada for 2011. In the U.S., CWT expects the Northeast region to experience substantially higher hotel rate increases than the national average, ranging from 12-12.5%. The highest Canadian increases will occur in the provinces of Manitoba and Saskatchewan, at 6.7-10.1%, also well above the anticipated national average.
CWT expects rental car prices will decrease 1.5-2% based on long-term corporate rates priced to earn and keep corporate business, even as tight inventory levels substantially drive up rental car rates for leisure travellers and companies without negotiated rates. Limousine and black car rental prices are expected to decrease 3-5%. Conversely, rail travel prices in North America are expected to increase 4-7%, as suppliers like Amtrak enjoy record-breaking ridership increases to date in 2010.
Meetings & events spending is expected to range from 1.9-2.3% ofan organization’s top-line revenues. Spending per attendee, per day will increase 7-11% based on returning demand combined with the limited number of suppliers of meeting services like hotels, food and beverage, etc.
CWT North America president Jack O'Neill said that during the first six months of this year the travel management company handled more than 13 percent more transactions than in the same period in 2009.
"These numbers reflect an improving picture for the economy around the globe and, depending on our clients' sector of business, a trend toward 'back to normal,' " he said in a letter to clients, noting that "business travel has not yet returned to pre-recessionary levels and it remains to be seen whether it ever will."
CWT said the consensus is toward slow economic recovery, with spending on travel not likely to reach 2008 levels until the second quarter next year
CWT North America’s annual travel forecast is intended to provide guidance to travel buyers as they budget for and negotiate their managed travel programs for the upcoming calendar year, and is designed to supplement their organizations’ own forecasting and budgeting exercises. The forecast in full is available here.
