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First-class airline tickets, second class lodging
Consumers are buying more first-class airline tickets but are more inclined to opt for economy when it comes to where they stay on the ground, according to a new American Express Business Insights study.
The report found spending on first and business-class airline tickets increased by 9.1 percent and 5.4 percent in the third quarter of last year. Consumers at the same time spent an additional 10.5 percent on economy lodging versus only 2.2 percent on luxury hotel rooms.
Why?
The reason for the seemingly bipolar spending: A growing frustration with flying and an improvement in the quality of economy lodging, industry analysts and travelers say.
"It really speaks to the fact that (consumers are) so concerned about the airline experience that they're willing to make the trade-off," said Maryam Wehe, senior vice president of hospitality at Applied Predictive Technologies, a consulting firm.
The spending trend applies to traveling for business or leisure, the study indicates.
The American Express study found that midscale and even upscale hotels, the second-highest category, lost favor among all types of travelers, with declines of 3.4 percent and 3.9 percent.
Ed Jay, senior vice president of American Express Business Insights, said:
"The most pronounced trend we're seeing is 'luxury or value,' which also speaks to the barbell effect apparent in travel — and other sectors — wherein consumers selectively choose either high-end or low-cost options, squeezing out the mid-tier providers with flat or declining spending growth,”
The upswing in business travelers opting for premium seats may also be attributed to companies loosening their policies on letting employees fly first or business class as the economy has improved.
Only 42 percent of companies banned premium-class air travel this year compared with 47 percent last year, according to a Global Business Travel Association report.
By David Wilkening
David
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