CWT Predicts Whopping 2009 Airfare Hikes
09/03/2008|9:34:00 AM|Btn online
AUGUST 29, 2008 -- Carlson Wagonlit Travel in a report to clients today said international and domestic airfares would undergo double-digit percentage increases in 2009, while it expects hotel rates to climb modestly and rental car rates to remain flat.

CWT said domestic airfares likely will rise by up to 12 percent in 2009, while international airfares are expected to increase between 16 percent and 20 percent, attributing much of that staggering growth to high fuel costs, new fees and surcharges and capacity cuts, the bulk of which take hold in the latter half of 2008.

CWT in its forecast said preferred supplier adoption, advance airfare purchases and use of restricted airfares, among other cost-saving tactics, could help companies in tempering the expected fare increases.

Domestic airfares during the second quarter this year reached a seven-year high, increasing 10 percent over the same period last year, while the average one-way international airfare grew 11 percent, according to American Express client data pulled for its quarterly Business Travel Monitor, released this week (BTNonline, Aug. 26).

CWT said the softening hotel demand and increased supply are creating "more favorable negotiation opportunities for many corporate travel buyers." As such, CWT expects companies to see an overall hotel rate increase of no more than 3 percent in 2009.

"Some discounting will be available in certain markets where occupancy levels are lower and supply has increased," CWT reported. "In these cases, buyers should be able to maintain a lower year-over-year rate or even negotiate a flat rate."

On the ground transportation front, CWT predicts rental car rates and rail transportation fares to stay flat next year in the United States.