Domestically, the total cost of a business trip is at a record high of $1,073, a four percent increase from Q2 and an eight percent increase from Q3 2017. Looking at trip components, the data shows that rising hotel costs are driving this increase. Quarter over quarter, there is a 12 percent increase in the total hotel cost of a business trip, and year over year there is a 16 percent increase. On the international front, hotel costs have also risen (13 percent since Q2 and 27 percent since Q3 2017 due to an increase in trip length).
“We are fortunate to be experiencing a strong environment for corporate travel,” commented Mike Boult, Senior Vice President of Corporate Sales at Travel Leaders Corporate. “The implications of this are a double-edged sword. There is strong demand for corporate travel in almost all sectors, but a healthy economy also means that suppliers can and are raising prices. Given the current environment, it is even more important for companies to consider a travel management partner not only for their greater buying power, but also for duty of care, travel spend management and overall traveler satisfaction.”
In addition to hotel costs, two other factors make up the overall cost of a business trip — airfare and car rental. The United States continues a trend of lowering car rental rates, with this quarter hitting a record low car rental trip cost of $143 (down from a record high of $165 in Q3 2017). Airfare is flat from the last quarter, but up six percent from this time last year. Outside of the United States, car rental rates are more even, with airfares rising three percent from the last quarter.
“An interesting trend comes from greater airline competition between legacy carriers and newer, lower-priced airlines,” Boult commented. “Years of careful analysis on the part of legacy carriers has revealed the need to break each plane into multiple micro zones to negate pricing risk. By offering numerous classes of service, including everything from business class to basic economy, legacy carriers are better able to compete with newer airlines with their breadth of service offerings. Similarly, in the hotel sector, we are seeing more and more consolidation. Along with that comes better data and an ability for hotel partners to match the right hotel for each business traveler.”
Travel Leaders Corporate also tracks hotel and car rental prices in the top 25 U.S. cities. The current national average for a one-night hotel stay is $164. The top 25 markets are nearly evenly split between running above the national average (13 cities) or at or below (12 cities). In the third quarter of 2018, cities in the northern part of the United States tended to maintain a higher than average price. Based on past data trends, many southern cities are expected to rebound in hotel prices in Q1 2019.
Other key findings:
- Airline Advanced Purchase: Travel Leaders Corporate’s third quarter data indicates that corporate travelers are taking advantage of the lower prices found with booking airline tickets early. The largest group of travelers—30 percent—booked their flights at least 21 days in advance of their trip, averaging a cost of $441. However, travelers booking 14 to 20 days in advance of their trip saved the most money out of all groups: $394 compared to $532 for zero to six days in advance. The data may be viewed here.
- Rental Cars: Despite the average total trip cost for car rentals falling, the average daily rate for car rentals nationally rose nine percent. The data may be viewed here.
- Trip Costs: Travel Leaders Corporate data on airline advanced purchases, and domestic and international unit and trip costs from air, car and hotel can be viewed here.
- Hotel Rates: Travel Leaders Corporate data on the average nightly hotel rate in the top 25 U.S. markets can be viewed here. Data on the average daily car rental rate in the top 25 U.S. cities can be viewed here.
“Indicators are pointing to continued growth in corporate travel,” said Gabe Rizzi, President of Travel Leaders Corporate. “Corporate travel is a complex subject though, and it’s important to keep an eye on how costs are trending. We closely monitor the trends to help our clients anticipate future costs and manage their travel spend as effectively as possible.”
For more information or to take advantage of Travel Leaders Corporate’s personalized service and cutting-edge corporate business travel solutions that provide a complete travel enrichment experience, email email@example.com or call 877-404-4173.
About Travel Leaders Corporate
Travel Leaders Corporate is part of Travel Leaders Group, which manages leisure, business and franchise travel operations under a variety of diversified divisions and brands. Travel Leaders Corporate has three service offerings – Travel Fulfillment, Travel Consulting and Meetings Management – which can be used independently or combined for maximum results. At Travel Leaders Corporate, each client is served by a dedicated team of professional travel agents assigned to each account. With a reputation built on reliability and a commitment to excellence, Travel Leaders Corporate offers its clients industry-leading products and services, and continuously seeks higher levels of performance. With employees in more than 120 cities across the United States, Travel Leaders Corporate is a forward-thinking, innovative company with a focus on continually improving the customer experience. Travelers also have access to The Travel Collection by Travel Leaders Group, a selection of travel offers and discounts available at no additional cost to holders of select American Express® cards. For more information visit www.TheTravelCollection.com.
2018: Year of the Travel Agent
Travel Leaders Group has named 2018 Year of the Travel Agent. Over the last decade, the travel agency industry has flourished through technology, the growth of travel options and personalized service. Travel Leaders Group represents approximately 52,000 travel agents with unmatched expertise in 135,000 destinations and 53,000 areas of interest. Travelers and suppliers have rediscovered the value a professional travel advisor delivers to the travel experience. Travel agents help to move people around the world, and keep our economy growing.