Business travelers on average paid less for plane tickets in the United States at the end of 2005 but shelled out more for hotels, car rentals and international flights than they have done in six years, according to a report released Tuesday.
In 2006, travelers can expect to pay more across the board, according to the Business Travel Monitor report released by American Express Co.'s business travel unit.
Domestic air fares settled to a six-year low last year despite high fuel costs partly because airlines led by Delta Air Lines Inc. cut the unrestricted fares often used by business travelers and because of increased low fare competition, American Express said.
"For 2006, however, the pricing trend lines indicate that corporate travel buyers will face a tough negotiating environment across the board," American Express Business Travel North America General Manager Andy McGraw said.
The past year has been especially good to U.S. hoteliers, who have been able to steadily increase room rates as business travel increased in a growing economy and supply growth slowed due to high construction costs.
Domestic airlines, on the other hand, have not been able to increase fares enough despite high fuel costs because of competition from discount carriers.
The study, which tracked 329 domestic city pairs, said the annual average air fare paid for business travel had declined since the end of 2000 to a low of $216 last year.
But the report said that quarterly average ticket prices edged up 3 percent in the fourth quarter, compared with the year ago period.
The upward march of air fares has continued in 2006, as airlines cut capacity and even discount carriers are forced to raise prices to counter fuel costs.
Southwest Airlines Co. raised its fares on Friday by up to $10 for a one-way ticket, a move that was matched by most major U.S. carriers.
Hotel rates both in the United States and in international markets increased too.
Average booked rates, which the company measures as the total spending by its clients divided by the total number of room nights confirmed, rose 6 percent domestically and 1 percent internationally in the quarter.
The average daily cost per car rental grew 3 percent to $67 in the fourth quarter of 2005, compared with the year ago period, the report said.
"Business and leisure travelers returning to the road in record numbers are literally driving demand, and prices," McGraw said.
