Industry Research

Egencia Sees Air Ticket Prices Rising Next Year In Key U.S. Markets

Posted on November 4, 2009 by LCT Staff - Also by this author - About the author

Egencia projects average ticket prices to annually increase in nearly all top North American business travel markets in 2010, with some cities even expected to experience double-digit percentage-point hikes, according to its 2010 Corporate Travel Forecast and Hotel Negotiability Index.

The online travel management company expects negotiated North American airfares for the top North American business travel destinations to rise on average 5% to 10% from 2009 levels. It predicts the largest increases for Seattle at 10%, Philadelphia at 11%, Phoenix at 12%, and San Diego at 16%.

EGENCIA attributed the expected price increases to a predicted rise in corporate travel demand, airline capacity reductions, carrier consolidation, and continued price inflation.

Meanwhile, the travel management company's hotel negotiability index, which factors in local convention and other one-off event demand effects, forecasts for at least the first half of 2010 the continuation of strong buyer's markets across North America, except for Boston and Washington, D.C., which is benefiting from the new "administration bubble," said Egencia North America senior vice president Pam Keenan Fritz.

Average daily hotel rates in the top North American business travel destinations are expected on average to be flat or drop by up to 5% from 2009 levels, according to Egencia.

Driving the continuation of the buyer's market and subsequent average daily rate decline projections is reduced demand, new supply coming into the markets and rising air prices having an adverse effect on hotel pricing, Keenan Fritz said.

In the U.S. car rental sector, the travel management company projects a 5% decrease in daily rates.

Source: Business Travel News

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