October 11, 2007
Travel costs are expected to rise only slightly in 2008 as compared to 2007, according to Runzheimer International, a Wisconsin-based management consulting firm specializing in travel management information and technology. Runzheimer forecasts airfare, lodging, meals, and car rental costs to rise an average of 4.5% in 2008, based upon historical trends and industry developments.
Airfares will rise 5% in 2008, according to Runzheimer, an increase that is less than historic annual forecasts. The relatively small increase is due to growing price pressures placed on the industry by low-cost carriers.
Legacy airline pricing power has been significantly diminished over the years,” states Phyllis Schumann, Product Manager for Travel Management Services at Runzheimer International. “In past years the differences between legacy airlines and low-cost carriers were noticeable, but today those differences are for the most part absent or undetectable.”
Similarly, lodging costs are predicted to rise only 5% during the next year, attributed primarily to buyers’ resistance to price escalation. Strategies such as downgrading room types will likely be used if negotiation strategies fail to control lodging prices.
Changes in eating habits−such as travelers choosing salads over steaks −as well as an increase in the availability of complimentary breakfasts are both factors influencing a predicted 5% increase in meal prices. In addition, a growing number of companies are negotiating meal prices in frequently-visited locations and implementing corporate policy caps for meal expenses to help control costs.
Runzheimer forecasts a 3% increase in rental car costs due in part to dampened corporate demand. High fuel costs are also to blame, in addition to companies making travelers aware of alternative commuting methods in order to deter unnecessary costs if the rental car is only being used to commute from the airport to the hotel.
* * * * *
About Runzheimer International
Founded in 1933, Runzheimer International serves 60 percent of the Fortune 500. Recognized for providing innovative solutions relating to total employee mobility, Runzheimer is the global leader in business vehicle reimbursement programs, travel management consulting, employee relocation and compensation, virtual offices, and corporate aircraft.
For more information, contact Jennifer Ruppel at Runzheimer International, Runzheimer Park, Rochester, Wisconsin 53167, 262.971.2271, jmr@runzheimer.com, www.runzheimer.com.
