American Express Predicts Business Travel Prices Will Increase in 2008



    
             -  Strong Canadian dollar will help contain rising
                           international air costs -
        -  Outlook expected to fuel tougher negotiating environment  -
    

    MARKHAM, ON, Dec. 6 /CNW/ - Overall business travel costs are expected to
increase in 2008, creating a much tougher environment for negotiating air,
hotel and car rental rates for Canadian companies, says American Express
Business Travel.
    In its latest edition of Trends and Forecasts for the Canadian Business
Travel Industry, American Express predicts higher prices are here to stay as
business travel demand increases and operating and fuel costs continue to
rise. International airfare will rise between 7-10% and hotel rates are also
expected to go up as much as 6-8% with room demand outpacing supply.
    "Canadian companies definitely see travel as a necessary investment in
their business," says Lyell Farquharson, Vice President and General Manager,
American Express Business Travel. "With high prices expected to continue well
into 2008, companies need to start thinking and acting more like bargain
hunting consumers so they can better manage their travel costs."

    
    -------------------------------------------------------------------------
           American Express Canadian Business Travel Forecast for 2008
    -------------------------------------------------------------------------
           Published Airfares            Published Hotel Rates    Car Rental
                                                                     Costs
    -------------------------------------------------------------------------
      Domestic/       International/     Mid-Range  Upper-Range
      Short-Haul        Long-Haul
    (Economy Class)  (Business Class)
    -------------------------------------------------------------------------
         2-5%             7-10%             5-7%        6-8%          2-4%
    -------------------------------------------------------------------------
    

    Air Travel Forecasts
    --------------------
    The biggest price increase is expected in international air prices, which
are forecasted to increase 7-10% in 2008. That is largely due to growing
travel demand, increasing operating costs and the high price of fuel, but
there are also other factors driving pricing upward.
    According to Amex, carriers will also focus on offering travellers
premium services such as more cabin space and enhanced business and first
class capacity. The costs of these investments are being passed on to ticket
prices.
    Looking ahead, the strong Canadian dollar will provide some cost
containment against the high costs of fuel. This, combined with improved
international flight offerings and newer and more efficient planes (that can
meet current and planned network needs) will also curb rising international
air prices.
    In addition, over the last few years, continued demand for lower fare
options has allowed low cost carriers to attract a much bigger piece of the
corporate travel market. As a result, carriers like West Jet and Porter
Airlines have increased their international and trans-boarder offerings which
have also put some downward pressure on increasing international air fares.
    Prices for domestic flights are expected to increase an estimated 2-5% as
carriers deal with growing demand and limited seat capacity.

    Hotel and Car Rental Forecasts
    ------------------------------
    In 2008, hotel stays are expected to rise 5-7% for mid-range rooms and
6-8% for upper-range rooms due to high demand and very little supply growth.
    With the hotel industry growing and building plans not likely to keep
pace, the overall cost of hotel stays will not only increase but corporate
discount opportunities may be limited and minimum and maximum stay
requirements may be applied.
    In addition, Dynamic pricing will also affect the price of hotel stays.
Over the last few years, many hotels have shifted toward a flexible pricing
model that allows them to adjust their pricing, depending on the demands in
the market, which can lead to unpredictable hotel costs.
    American Express says a well managed hotel program is an often overlooked
piece of the corporate travel market that may provide greater savings
opportunities than an airfare program.
    "Hotels represent a huge area of costs savings," says Lyell Farquharson.
"The price of a two or three night hotel stay in a major city like New York or
London can be well above the costs of an international flight. Companies need
to lock into a travel management program that offers a negotiated rate so they
are protected from the unpredictable costs."
    Within the car rental sector, increased demand, high interest rates and
increased taxes are expected to place upward pressure on car rental rates and
surcharges. Car rental rates are expected to increase an estimated 2-4%.
    Companies should look to control car rental costs by renting mid-sized
cars, not over insuring and refueling before returning the car.

    American Express Expertise
    --------------------------
    Canadian companies need a travel management program that can help them
save money, time and resources. American Express offers companies a
comprehensive end-to-end travel management program with solutions in business
benchmarking, advisory services, preferred supplier programs and global
expertise.

    Methodology
    -----------
    Projections were based on a combination of statistical forecasting,
in-depth research of supplier markets, regional economic trends, interview
with American Express industry analysts, and analysis of reports generate
within and outside American Express. Actual changes in business travel costs
could vary from forecasted data, particularly as a result of unforeseen future
political, economic, and/or environmental events.

    About American Express
    ----------------------
    American Express in Canada operates as Amex Canada Inc. and Amex Bank of
Canada. Both are wholly owned subsidiaries of the New York based American
Express Travel Relates Services Company, Inc., the largest operating unit of
the American Express Company. Amex Canada Inc. operates the Business Travel,
Travel Services Network and Travelers Cheques divisions in Canada. Amex Bank
of Canada is the issuer of American Express Card in Canada. American Express
opened its first offices in Toronto and Hamilton in 1853 and now employs more
than 3,700 Canadians coast-to-coast.





For further information:

For further information: For media information, contact: Tara Peever,
Public Affairs & Communications, American Express, Tel: (905) 474-8461, Email:
tara.m.peever@aexp.com

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