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AS AIRFARE & HOTEL PRICES SOAR, MEETING PLANNERS ANALYZE TOTAL COST

The good news is that business travel is up. The bad news is that higher air fares (not to mention longer lines and delays) and higher hotel rates are with us for the next few fiscals. Corporate airfares will increase up to 11 percent next year, and hotel room rates could soar to 14 percent in some markets, according to the just-release BCD Travel 2007 Industry Forecast.

"Over the past two years, we’ve seen strong, sustained growth in business travel, and this continues to drive industry prices higher," said Mary Ellen George, general manager of BCD Travel Consulting, which produced the forecast. "We expect growth—and high prices—to continue for at least the next two years."

BCD Travel, the world’s third-largest corporate travel-management company, produces an industry forecast each year for clients. The forecast draws on BCD Travel’s extensive knowledge of the corporate travel industry, offering a look ahead to the next year.

The full BCD Travel 2007 Industry Forecast is available at here or at www.bcdtravel.com (in the Information Center section under "White Papers").

Key predictions include:

• Airfare increases: "During the first six months of 2006, overall air passenger traffic grew by 6.8 percent. We expect this passenger growth rate to continue into 2007, resulting in corporate airfare increases of 7 to 11 percent."

• Long lines and security: "We expect travelers will continue to experience long lines at airport security checkpoints, overbooked flights and high airfares, and face increasing fuel surcharges as airlines offset operating costs with all available revenue sources."

• Hotel rates and supply: "BCD Travel Consulting expects the 2007 average daily room rate to increase by 6 percent on average, with rate increases in some markets as high as 14 percent. We do not anticipate relief until well into 2008, when the supply of hotels begins to approach demand."

• Meeting costs: "Average group room rates will increase 3 percent to 5 percent in 2007. In popular meeting destinations, group room rates are expected to increase 8 percent to 9 percent."

According to Julie Carroll, VP of Partner & Industry Relations for BCD Meetings & Incentives, to balance out rising demand for meeting travel with the rising cost of airfare and lodging, corporate and associations are looking more closely at the bottom line. "Groups may be backing off paying for ancillary events, or sending less people to a meeting or convention, of having some of the members spend less time at the event."

TRUE COST OF STAY

For 2007, BCD Consulting recommends that travel buyers consider all components available to the traveler, especially a more in-depth Review of "true cost of stay." The study found that when hotels bundle prices as opposed to charging for the room and other services a la carte, meeting planners can accrue significant savings in the current economic climate. The study states: "A focus on the total cost of stay evaluates the cost savings achieved by including amenities in the negotiated daily hotel rate… allow companies to achieve savings in an upturn market."

Hotels may be more apt to offer meeting attendees and other group business travelers package-pricing, but corporate and association business travelers need to do an in-depth, internal analysis in order to effectively negotiate for improved True Cost of Stay savings. "Most hotels are chains, and the room rate is fixed as part of corporate policy, and but they will add other services as part of the rate if negotiated," said Maria Chevalier, who is VP of business intelligence for BCD Travel. "Organizations must have better spend data and analyze what their travelers are spending on during their visits so they can better take advantage of any Total Cost of Stay savings."

As a leading provider of global corporate travel management, BCD Travel operates in 96 countries on five continents, with US$12 billion in total sales and a combined worldwide workforce in excess of 12,000. BCD Travel is a BCD Holdings N.V. Company, which also includes BCD Travel, Park 'N Fly , TRX, and Airtrade.

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