Airfare Rises, Hotel Rates Stay Flat

March 21, 2011

This article is included in these additional categories:

Financial Services | Local & Directories / Small Biz | Retail & E-Commerce | Uncategorized

amex-q410-airfare-mar-2011.JPGDomestic and international airfare both jumped 7% in 2010 compared to 2009, according to new data from American Express Global Business Travel. Meanwhile, domestic hotel rates stayed flat and international hotel rates slightly decreased.

Airfare Returns to Pre-recession Levels

On a year-over-year basis, average 2010 domestic airfare of $231 and international airfare of $1,795 both rose 7% from their 2009 average rates. The domestic figure is slightly higher than the 2007 (pre-recession) average of $230, while the international figure is about 2% lower than the 2007 average of $1,836.

Interestingly, the highest average airfare figures recorded in recent years occurred in 2008, the first full year of the recession, which is generally pegged as starting in December 2007. In 2008, average domestic airfare was $246 (2010 figure is 6% lower) and average international airfare was $1,955 (2010 figure is 8% lower).

Quarterly results are similar. In Q4 2010, average domestic airfare was $231, about 4% higher than $223 in Q4 2009 and 2.5% lower than $237 in Q4 2008. Meanwhile, Q4 2010 average international airfare was $1,865, 5% higher than $1,778 in Q4 2009 and 3% lower than $1,957 in Q4 2008.

American Express predicts increases in airfares are likely to remain on an upward trend in 2011. So far this year, American Express analysis indicates domestic airfare rates in January 2011 are up 8% compared to January 2010.

Domestic Hotel Rates Stay Flat, Internatl Rates Decline

amex-q4-10-hotel-mar-2011.JPGAmerican Express data shows that average domestic hotel rates have changed little in the past few years, but average international hotel rates have come down. The average domestic hotel rate in 2010 was $152, flat from 2009, virtually flat with $153 in 2008 and up 2% from $149 in 2007.

The average international hotel rate in 2010 was $236, down slightly from $238 in 2009 but 6% less than $252 in 2008 and 2007.
Fourth quarter results are also similar for average hotel rates. The average domestic hotel rate in Q4 2010 was $164, up about 1% from $162 the previous two years and 4% from $157 in 2007. The average international hotel rate in Q4 2010 was $244, essentially flat with $243 in Q4 2009.

In an anomaly, the average Q4 2008 international hotel rate was only $208, 17% lower than Q4 2010. The Q4 2007 average was $266, or 9% higher.

Vegas Has Highest Average Q4 Rate Increase

amex-hotel-rates-us-cities-mar-2011.JPGAmong US cities in 2010, Las Vegas, NV had the highest average year-over-year hotel rate increase in Q4 2010, rising 12% from $137 to $153. Among the next four cities which all tied for the second-highest increase rate of 5%, New York, NY had the most expensive cost ($402), roughly 80% more than the next-highest cost of $220 in San Francisco, CA.

Biz Spending Leads Travel Recovery

The travel sector shows signs of a positive upswing when looking at Q3 2010 compared to Q3 2009, according to a recent report from American Express. “Spend Sights Report Travel Industry” indicates business spending appears to be leading ahead of consumers across all segments of travel, suggesting corporate budgets are loosening in comparison to recent years.

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