Business travel rates set to outstrip budgets in 2013

A new report has indicated that increases in the costs associated with companies deploying staff on overseas business trips could outstrip prearranged budgets during 2013.

Budgets that are already likely to have been tightened could be made to burst at the seams if overseas trips are deemed imperative, according to predictions by the US-based Global Business Travel Association (GBTA.L). The Association’s prediction is that hotel rooms and airfares in most classes are set to increase in price by around 8 percent this year. It says that the average international economy ticket purchased in the USA will cost $1,217, while the same trip in business class will cost $5,152. A travel buyer’s world travel spend is likely to account for around 30 percent of their total travel budget.

While the rates for US domestic travel are expected to see more modest increases of 4.6 percent for air travel and 3.7 percent for hotel accommodation, even those predictions are well in excess of the 2.9 percent increase that buyers had been anticipating.

The GBTA puts the expected price increases down to a growing demand for air travel, accommodation and meeting space that will enable hotels and airlines to be less generous in discounting their prices.

Vice president of research for GBTA, Joseph Bates, was quoted by Reuters, saying, ‘Travel buyers are being pushed to balance higher costs, the need to get travellers on the road, and corporate budget constraints. Strategic travel management programs will play a key role for companies dealing with a tougher negotiating environment and focused on getting the most out of their travel spending.’

297 travel buyers in the US were questioned for the survey by the GBTA last October.