Going The Distance
Travel costs are expected to soar this year.
There's good news and bad news for business travelers this
year, according to researchers at Runzheimer International. Car
rental, hotel and meal prices should rise at reasonable rates. But
air travel rates will climb considerably faster, rising 10 percent
higher in some segments.
The reasons for the increases vary by industry segment. Lack of
competition on many air travel routes will lift average full-fare
economy ticket prices by more than 5 percent, while high occupancy
rates will lead to average lodging cost increases of 4.9
percent.
Smaller fleet sizes and higher costs are exerting similar
pressure on car rental rates, which will lurch forward by 4.8
percent, while a trend toward less restaurant dining is keeping
restaurant prices at a modest 3.5 percent increase.
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As Roanoke, Texas, airline consultant Barry Clark sees it, the
markups will especially impact airline travel. "As airlines
push their rates higher, [business owners] are going to look for
other ways to buy tickets," he predicts. That means you may
soon find yourself eliminating some of your travel agent's
services in favor of a direct-purchasing agreement.
Car rental rates may outpace air fare increases in some parts of
the country, according to Steve Swope. "The cost of supply in
the car [rental] industry has gone up, but prices haven't gone
up as dramatically as they should have," notes the senior vice
president of Talus Solutions Inc., a revenue management solutions
provider in Atlanta. "That's going to change this
year."
Bruce Tepper, a travel and tourism consultant with Joselyn
Tepper & Associates' San Francisco branch, sees another
side effect of the rising travel expenses when it comes to hotels.
"Demand is catching up with supply in the lodging industry. In
many cases, the house is full and there's less willingness for
the property to negotiate [prices]," he says. "So
travelers [may have to] trade down to a cheaper brand."
One thing is certain: You'll be paying more--perhaps a lot
more--for travel in the months to come.
Christopher Elliott is a writer in Los Angeles and a
columnist for "ABC News Online."
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