Fares Might Affect Travel For Business

TAMPA - Hey, road warrior. It might be tougher to slide that expensive meal or costly flight change past the boss next year.

Two travel groups this week forecast increases in airline, hotel and other travel costs in 2008 and predicted companies will adopt stronger internal controls to keep employees from overspending.

An American Express business travel group and the Travel Industry Association trade group in separate reports released Tuesday and Wednesday concurred that U.S. and international travel costs will continue to increase in 2008.

Airfares in 2008 from U.S. destinations will increase between 1 percent and 10 percent, hotel rates between 4 percent and 7 percent and car rentals between 2 percent and 4 percent, the American Express Annual Global Travels Forecast showed.

In response, corporate travel executives likely will tighten travel policies for their employees. More companies will expand their Internet bookings and be more rigorous with pre- and post-travel reviews in 2008, the American Express travel group said Tuesday.

'Companies realize they are going to achieve greater savings by looking internally to gain control,' said Mitch Cwanger, an American Express Business Travel official specializing in aviation advisory services.

Containing costs can go a long way toward keeping budgets in line without curtailing trips, American Express said.

Those include:

•Improving negotiating power among travel service suppliers by insisting employees use company-preferred hotels and airlines and finding times and routes where travel demand is low.

•Encouraging online booking tools. About 50 percent of U.S. clients used online booking tools in 2007, a rate expected to increase to 55 percent in 2008, said Mike Streit, vice president and global leader for American Express Business Travel.

•Creating policies that use strong language to eliminate ambiguity. Companies should 'give specifics on what is and what is not within policy,' Streit said. Setting price limits for meal reimbursements instead of encouraging 'reasonable' expenses is one way to clarify expectations among employees.

The average U.S. domestic business trip with air travel in 2008 will increase 3.3 percent, or $33, to $890, and the cost of international business trips from the United States will increase 7.8 percent, or $248, to $3,424, American Express reported.

American Express attributed some increases to rising fuel costs and interest rates, but explained that costs are rising in large measure because of the combination of higher demand and slower growth of travel products.

Consumer competition for airline seats among leisure and business travelers and for hotel accommodations is working in favor of the airlines and hoteliers, the American Express panelists said. Travel suppliers are becoming more sophisticated in pricing and keeping those prices high.

New York hotel prices are forecast to have the highest increases in 2008 among major U.S. cities - from 10 percent to 14 percent. That's a bargain compared with a 19 percent to 24 percent increase predicted for room rates in the United Kingdom.

American Express predicted cost increases in all phases of worldwide travel, with one notable exception: Rail fares in Europe will remain relatively stable and carve into airline travel.

The Travel Industry Association, a Washington-based advocacy group for the tourism industry, predicted a 2 percent growth rate for business trips in 2008 compared with a 1.7 percent decline in 2007.

Leisure trips are expected to increase by 0.4 percent in 2008 compared with a 2.5 percent gain in 2007.

'The conventions and meetings market is doing better, while transient business travel for sales trips is declining as businesses use new technologies in place of individual travel and implement corporate travel policies,' said Suzanne Cook, senior vice president of research for the Travel Industry Association.

An area that's gaining interest among travel industry operators is the 'green travel market.' The association and Ypartnership, an Orlando consulting firm, produced a report last month that found 78 percent of adults considered themselves to be 'environmentally conscious.'

But they're not as willing to pay for environmentally oriented travel. Only 13 percent said they would be willing to pay higher fares or rates to suppliers like hotels or car rental companies that demonstrated environmental concern, compared with 52 percent who answered 'maybe' and 35 percent who answered 'no.'