The average cost of a U.S. business trip – including air, car and hotel averaged together – in Q4 2016 fell 4% to $945 (from $980). This was the second consecutive quarter that the average domestic trip price has fallen and is the lowest it’s been since Q4 2013. It should also be noted that Q4 is traditionally slower for business travel and pricing falls in line with decreased demand. The average cost of an international business trip was $2,167, a 5% decline from Q3 2016 and nearly 4% lower than Q4 2015. The strong value of the U.S. dollar continued to play a significant role, much to the benefit of American business travelers.
“There is a natural cycle in business travel, whereby the fourth quarter is typically slower than the rest of the year. However, for those companies who continued to invest in travel, they experienced far greater returns based on the overall costs,” said Gabe Rizzi, President of Travel Leaders Corporate. “We will be keeping a close eye on how those trends may shift with the start of a new year and with a new administration in the White House. One of the differentiating benefits our clients enjoy is our ability to analyze their travel data and identify opportunities that will provide the most value for the investment they are making in business travel. We help demonstrate that it’s not just a line item cost but can have a real, tangible and positive impact on their business.”
Travel Leaders Corporate also released information on comparable hotel rates. The average total trip cost for domestic hotels fell sharply in the last quarter of 2016. However, the average nightly cost of a hotel remained on the upward trend of the last several quarters. Those competing trends indicate that business travelers spent more per night on hotel rooms and offset that by shortening the length of their stay.
Also, according to Travel Leaders Corporate’s business travel data, 22 of the top 25 cities in the country showed increases over the last three years in average nightly hotel rates. This quarter, however, colder weather affected both northern and southern cities. In Florida, the average nightly hotel rates in Fort Lauderdale, Miami, Orlando and Tampa rose an average of 15% from the third quarter of 2016. Most cities in northern locations were uniformly affected in Q4, with Minneapolis showing the largest decline of all locations with hotel prices 20% lower from Q3 2016.
“The opposing quarterly trends, based on geographic location, are understandable. The takeaway is really that the average nightly rate for hotels continues to increase,” added Rizzi. “Heading into 2017, we believe U.S. hotel rates will continue to increase, likely a mid-single digit increase. In Europe, we also anticipate hotel rates will increase slightly.”
Other key findings:
- Airline Advanced Purchase: Travel Leaders Corporate’s fourth quarter data indicates that corporate travelers are split nearly evenly in each category of advanced purchasing of airline tickets: 0-6 days before departure, 7-13 days before departure, 14-20 days before departure, and 21 or more days before departure. As a best practice, Travel Leaders Corporate recommends booking at least 14 days in advance for cost savings, and for those booking at least 21 days in advance, instead of 0-6 days, there is an average price difference of $161. This data may be viewed here.
- Rental Cars: The average daily rate for car rentals nationally rose nearly 3%, with 15 of the top 25 markets showing increased rental rates. 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.
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.
Travel Leaders Corporate is part of Travel Leaders Group, which is the highest ranking American travel management company in Business Travel News’ Business Travel Survey 2016, and has annual sales of $21 billion. Travel Leaders Corporate’s 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 U.S.-based 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. Headquartered in Miami, FL, and 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. www.tlcorporate.com