American Express points to some hopeful signs in higher business travel figures for the third quarter, with average international and domestic paid airfares increasing 2 percent from the previous quarter.
The third quarter numbers were collected by the AmEx Business Travel Monitor, which tracks booked purchases of American Express Travel clients.
There has also been a slight increase in the usage of business class tickets for international travel, up one percent from last quarter, to 37 percent. However, this is still down year-over-year from 49 percent of all international business traveler tickets purchased.
“This is an encouraging sign for the business travel industry because it indicates increasing demand as well as willingness to pay for premium products, which help with supplier profitability and their ability to provide consumer discounts,” said Christa Degnan Manning, director, eXpert insights, Global Advisory Services, American Express Business Travel.
Some other findings for the third quarter:
- Average international booked hotel rates decreased 10 percent year-over-year.
- Average domestic booked hotel rates decreased two percent year-over-year, but increased seven percent in budget-tier hotels quarter-over-quarter.
- Car rental rates increased five percent in quarter-over-quarter and remained flat year-over-year.
Manning said there has been a continued drop in demand for international and domestic hotel bookings.
“Since hotels can not reduce capacity as easily as air or ground transport providers, this drives rates down, and the effect will likely continue through the first half of 2010,” Manning added.
But, she added that there are signs of an increase in demand from the bottom up, “where rates have notably increased up to 7 percent in lower hotel tiers.” The increase was driven by “travelers wanting to travel, yet doing so more cost-consciously.”