Trends in busines travel spending according to Orbitz

July 30, 2008 | Online Travel

With industry data showing continued increases for both average domestic airfare and the average daily rate for hotels, Orbitz for Business unveiled a ranking of the top business travel markets in which these costs have demonstrated price fluctuations.

Record costs for jet fuel and a soft economy have forced many airlines, business travelers and corporate travel programs to explore and implement aggressive cost-cutting measures in 2008. With industry data showing continued increases for both average domestic airfare and the average daily rate for hotels, Orbitz for Business today unveiled a ranking of the top business travel markets in which these costs have demonstrated price fluctuations, including increases and decreases in business traveler spending.

Average Air Transactions

Orbitz for Business used year-to-date client bookings to determine this newest trend in traveler spending. For example, based on Orbitz for Business transactions, the market that has seen the greatest percentage increase dollar-wise in average airfare is Columbus, Ohio; while Salt Lake City, Utah, tops the list of cities on a percentage basis that have seen their average airfare decrease in 2008.

Top 10 Business Travel Markets Where Average Cost For Air Travel Has Increased or Decreased

Increased
1. Columbus, OH
2. Toronto, Canada
3. New York City (all airports)
4. Houston, Texas
5. Newark, N.J.
6. Minneapolis, Minn. .
7. Indianapolis, Ind.
8. Detroit, Mich. .
9. Richmond, Va.
10. Cleveland, OH

Decreased
1. Salt Lake City, UT
2. Los Angeles, Calif.
3. London, England
4. San Antonio, Texas
5. St. Louis, MO
6. Atlanta, GA
7. Fort Lauderdale, Fla.
8. Seattle, Wash
9. San Jose, Calif.
10. Portland, Ore.

Based on percentage increases and decreases for 2008 Orbitz for Business bookings that included a minimum of 1,000 air transactions per market.

The U.S. Bureau of Transportation Statistics shows the average domestic airfare increased 4.5 percent through the first quarter of 2008. Additionally, Consumer Price Index data lists the average domestic airfare increasing an additional 4.5 percent in June alone, its largest monthly increase since March 2000. In contrast, the average air transaction among Orbitz for Business’ customers has increased less than two percent (1.55%) thus far (through July 23) in 2008 over the same time period last year.

Average Daily Rates—Hotel

According to Smith Travel Research, a leading provider of data and information in the hospitality industry, the average daily rate for hotels in the U.S. is up five percent in 2008. But while some may be paying more for lodging, Orbitz for Business hotel bookings also reflect percentage decreases in spending (measured by average daily rate) in a number of top markets, including New York City, Boston, San Francisco and Dallas.

Top 10 Business Travel Markets Where Average Daily Hotel Rate Spending Has Increased or Decreased

Increased
1. Pittsburgh, Pa.
2. Sacramento, Calif.
3. Toronto, Canada
4. Charlotte, N.C.
5. Minneapolis, Minn.
6. St. Louis, MO.
7. Orlando, Fla.
8. Tampa, Fla.
9. Columbus, OH
10. Washington, D.C.

Decreased
1. Dallas, Texas
2. Las Vegas, Nev.
3. San Diego, Calif.
4. Phoenix, Ariz.
5. New Orleans, La.
6. Cleveland, OH
7. Baltimore, MD.
8. San Francisco, Calif.
9. New York City
10. Boston, Mass.

Based on percentage increases and decreases for 2008 Orbitz for Business bookings that included a minimum of 1,000 hotel room nights per market

A recent Orbitz for Business and Business Traveler Magazine survey found that more than two-thirds (68%) of travelers say they are now staying at less-expensive/lower star-rated hotels as a means to save money.

“It’s interesting that in some key markets where customers are spending more on airfare their hotel spend is down, with New York City serving as a prime example,” said Dean Sivley, COO and senior vice president, Orbitz for Business. “Some spending increases are inevitable in our current travel climate, however we’ve been very proactive in integrating cost saving products and initiatives to help our customers best manage their travel programs.”