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November 15, 2016

Stats and Trends: Business Trip Costs Fall in Q3




A new study on business travel from Travel Leaders Group leads this week’s stats and trends in the meetings industry. 

Travel Leaders Corporate has released a new study on booking data from the third quarter of 2016 that shows the average cost of an international trip (air, hotel and car rental) declined quarter over quarter to $2,287. That result is also 3 percent lower than in the third quarter of 2015. 

Domestic airline costs also fell, with the average ticket price at $403, down nearly 5 percent from the previous quarter and 7 percent year over year. While the overall average nightly rate for a domestic hotel decreased slightly (1.3%), costs increased in nearly one third of the top 25 U.S. cities. 

The average cost of an international business trip (air, hotel and car rental averaged together) continued its declining price trend that started in the first quarter of 2015. From Q2 2016 to Q3 2016, international trip total costs declined very modestly by less than 1 percent. Since the third quarter of last year, however, the data underscores a different story – the average overall coast of an international business trip has dropped 3 percent. The strength of the dollar, relative to the pound and Euro, has contributed to the softening of international corporate travel prices.
 
With regard to hotels, the average nightly cost of an overseas hotel fell 7 percent to $184 in Q3. But domestically, the average nightly hotel rate rose for the most part, and, in 60% of the top 25 U.S. cities, the average nightly hotel rate was at or above the national average of $155. The major exceptions were Florida markets (Fort Lauderdale, Miami, Orlando and Tampa), which all showed sharp decreases in the third quarter. The cities that had the greatest increase in hotel prices were Detroit (+12%) and Salt Lake City (+10%). U.S. business travelers spent an average of $413 on their hotel, per trip. This represents a 17 percent increase since Q4 2013, when the average hotel trip cost hit a record low of $353.

Other key findings: 

Trip Length: Average length of an international business trip has decreased from 6.31 to 5.82. The average length of a domestic trip increased from 2.99 (Q2 2016) to 3.05 this quarter.

Airline Advanced Purchase: Travel Leaders Corporate’s third 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 $162.

Rental Cars: Across the board in the top 25 markets, the third quarter continued a trend of decreased average daily rates in car rentals. Only Atlanta, Charlotte, Detroit, Las Vegas, Miami, Minneapolis, Salt Lake City and St. Louis showed increased car rates, and many of those markets were still under the national car rental average of $38.23.

Source: Travel Leaders Corporate


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