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Why biz travel to continue despite rising prices
Rising prices for airfare and hotels may slow business travel, according to a report by American Express. but it should have little impact on travel for several reasons.
Travel costs for businesses will continue to increase in 2012 as airlines and hotels squeezed by rising expenses push their fees higher, says the credit card company’s Global Business Travel Forecast.
For business class air travel, short-haul prices are slated to rise 5 to 7 percent, while long-haul could be up 3 to 5 percent, according to AMEX.
Hotel prices are also slated to increase, albeit slightly, the survey notes
But business travel will continue to be essential to global economic performance and act as an enabler of business growth, said Christa Degnan Manning, director of research at American Express.
“As more and more companies understand the importance of putting people on the road and its criticality to converting prospects, retaining clients, and ultimately driving growth, particularly in emerging nations, we expect to see travel prices go up,” she said.
“Even with the higher price, though, companies are expected to continue traveling, “ said Fox Business.
“There’s a link between travel and a company’s top-line growth,” said Alicia Tillman, vice president of global communications marketing services for American Express’ global business travel.
In an earlier AMEX survey, it found that companies that utilize business travel estimate that they won over half of their perspective customers through face-to-face contact. That compares with less than one-third without personal meetings.
“Despite emerging technologies that can serve as alternatives to travel, nothing really replaces what you gain with those in person interactions,” Tillman said.
She added that travel is seen as a competitive advantage. It also helps build client relationships.
By David Wilkening
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