Operations

Business Travel Costs To Rise 12%

Posted on October 5, 2005 by LCT Staff - Also by this author - About the author

ROCHESTER, WIS. – The cost of business travel will increase 12% in 2006, Runzheimer International predicted last week. The Rochester, Wis.-based consulting firm said increasing fuel prices would affect all sectors as airlines raise fares further, additional food delivery costs push meal costs up roughly 11% and mounting fleet costs drive car rental pricing higher.

"Often used as a travel mode alternative, car rental will likely not be advantageous in the upcoming year," the company said.

To offset the expected increases, Runzheimer said travel managers likely would emphasize supplier negotiations and consider "non-standard" lodging and transportation services, including company-owned dormitories.

"In addition to supplier negotiations, travel managers will likely take a closer look at their travel policies," said Phyllis Schumann, Runzheimer travel management consultant. "Travel managers are realizing that in order for guidelines or caps for individual components to be effective, they must be geographically specific. Just as we have seen gas prices fluctuate differently in different locations, so do travel prices."

Other analysts and travel management companies also anticipate more expensive business travel next year, including increased corporate air spend and sharply higher negotiated hotel rates, according to travel industry sources.

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