What Business Travellers in the Americas Can Expect to Pay 2017
Splash Image: Dushan Hanuska (Flickr)
After an uneven 2016 that saw only limited increases in overall pricing, the business travel outlook for next year looks to be similarly subdued, with flat to moderate rate increases expected globally across air, hotel and ground transportation, according to Global Business Travel Forecast 2017 by American Express Global Business Travel.
The continued slowdown of the Chinese economy and depressed oil prices, the United Kingdom’s impending departure from the European Union, growing populist politics and increased security concerns in many countries have together created a higher level of uncertainty in the global marketplace.
Rodolfo Elizondo, Vice President and Head of Global Business Consulting at American Express Global Business Travel (GBT), believes that in this period of political and economic uncertainty, companies and business leaders will welcome news that the cost of business travel may, at worst, endure only modest increases. “Travel managers should focus on the things they can control, like demand management, compliance and traveller satisfaction to reduce risk and increase savings,” he said.
The report included several Canadian highlights for travel
Domestic competition and economic weakness in Alberta will continue to put pressure on demand and lead to decreasing short-haul business fares in that part of the country.
A stronger US dollar has made the United States a more expensive destination for Canadian travellers and is causing demand for trans-border flights to drop accordingly. Fares are expected to decrease further in 2017, dipping between 2% and 5%.
The impact of low oil prices continues to be felt across Canada. Calgary in particular is feeling the effect and hoteliers will struggle to achieve rate increases even if the price of oil improves in the near term.
In Ontario and Quebec, manufacturing and exports have increased due to a weaker Canadian dollar and lower oil prices. The Toronto sector has enjoyed very healthy rate growth in 2016 and this trend is expected to continue in 2017. Montreal hoteliers are well positioned to enjoy increased occupancy and average daily rates.
Like the US, ride-sharing competition will likely heat up with companies such as Uber and Lyft increasing their market share. Investment in technology enhancements is critical for all brands across all regions to stay competitive with ride-sharing companies. Stricter regulations, however, against ride-sharing services could eventually hinder profitability and eliminate some of the low-cost rides being offered.
For more information on the report and specific reports for the Americas, Europe and Asia, visit American Express Global Business Travel.