NTBA forecasts rise in overall costs for 2008

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Things are looking up in the business travel market for next year. According to the National Business Travel Association, costs of air fare, hotel rooms, car rentals and food -- the staples of the corporate travel budgets -- are all going up.

According to the 2008 National Business Travel Association Forecast, compiled by travel analyst Jorge Caamano, overall costs for corporate travelers are expected to rise between 6% and 8% next year -- assuming that business travel growth continues amid a healthy economy.

Continued market globalization will underpin growth as well, the NTBA forecast predicted.

Caamano's forecast also anticipated significant downsides.

A strong potential for inflation, continued fluctuations in oil prices, detrimental impacts on the U.S. economy from rising spending due to the war in Iraq, and the crash of the sub-prime real estate market, all factor in as potential problems for business travel planners as they survey costs and prepare budgets for 2008.

Published air fares, the NBTA said, will likely lead the rising costs with a 6% to 10% increase if predictions hold that flight prices will approach the level they reached in 2001, prior to 9/11. Parity with 2001 air fares would mean a 10% increase in air travel costs over 2007, the report noted.

Published hotel and car rental rates are expected to rise by 5% to 7%, and the cost of meals and incidentals purchased by corporate travelers is likely to go up by 7% to 9%, the forecast predicted.

From a survey of its members, the NBTA says that only 10% of corporate travel buyers expect 2008 spending to remain at levels similar to 2007. Some 73% said they expect their spending to increase by 5% to 10%.

This week, American Express released its annual Global Business Travel Forecast with similar predictions. 

To contact reporter Dan Luzadder, send e-mail to [email protected].

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