Amex makes 2012 rate predictions

A global forecast released on Wednesday by American Express Global Business Travel projected conservative air, hotel and ground transportation rate increases worldwide next year. Driving the expected increases is companies continuing to invest in travel to support growth while travel providers carefully manage supply.

Conservative increases are expected in hotel rates, however, to varying degrees around the world. Notably, hotels in metropolitan areas are poised to see higher increases. Overall, business travel rate increases are likely to be conservative in North America and Europe, while Asia and Latin America are likely to see relatively higher increases as travel demand within and to these regions remains strong.

In North America, hotel rates are projected to increase 2.5% to 6.5% in the mid-range and 1.5% to 5.5% in the upper range. The low single-digit gains hoteliers were able to secure in average business travel rates in 2011 are likely to continue in the coming year as hoteliers seek to reach pre-recession room rate levels.

For corporate hotel rates in EMEA, the region is likely to see conservative increases. However, American Express reports there will likely be declines in markets like Spain and Greece that are enduring particularly challenging economic conditions. Rate in mid-range hotels are projected to increase 0.5% to 4.5%, while upper-range hotels should experience increases from 1% to 5%.

In Latin America, hotels are projected to have moderate increases at both mid-range and upper-range properties. Hotel occupancy and pricing for the region are primarily influenced by the strength of business hubs including Buenos Aires, Mexico City, Santiago, and Rio De Janerio.

In Asia Pacific, as with airfare, the increased volume of travelers in the region, coupled with constrained capacity, is resulting in increased hotel rates. However, pricing fluctuations impact Asia Pacific as they do the rest of the world, with expectations for declines in some cities based on location-specific conditions. For example, Shanghai has abundant capacity, having added significantly for Expo 2010, so will likely see price declines. Both mid-range and upper-range hotels are expected to see 6% to 10% increases.