Amex GBT Says Biz Travel Pricing To Stay Steady Amidst Uncertainty

Open Jaw

After an uneven 2016 that saw only limited increases in pricing, the business travel outlook for next year looks to be similarly subdued, with flat to moderate rate increases expected globally across air, hotel and ground transportation.

That’s the main takeaway from the Global Business Travel Forecast 2017 by American Express Global Business Travel. Another key message is that a high level of global uncertainty makes everything hard to predict.

Amex GBT says a number of factors have together created a higher level of uncertainty in the global marketplace. They include: the continued slowdown of the Chinese economy; depressed oil prices; the UK’s impending departure from the EU; growing populist politics; and increased security concerns in many countries.

On a global basis, here are some key predictions from the report:

Air: Global demand for air travel remains at a record high; persistently low fuel prices and strong competition will help keep airline fares in check.

Hotel: Hotel performance will improve moderately and prices will remain flat in most regions with the exception of Latin America, where rates will decline slightly, and Asia Pacific, where the impact varies greatly by country.

Ground: Ground transportation has strongly felt the impact of new industry players and rates should remain flat as capacity continues to exceed demand.

Rodolfo Elizondo, Amex GBT VP and Head of Global Business Consulting, believes that in this period of political and economic uncertainty, companies and business leaders will welcome news that the cost of business travel may, at worst, endure only modest increases.

“Travel managers should focus on the things they can control, like demand management, compliance and traveller satisfaction to reduce risk and increase savings,” he said.

Here’s a look at key Canadian highlights from the report:


  • While capacity growth in 2017 will be lower than in 2016, it is likely to remain above demand growth, putting continued downward pressure on business fares. Short-haul economy fares are predicted to drop by 3.8%, while long-haul business fares are projected to decline by 3.0%.
  • Domestic competition and economic weakness in Alberta will continue to put pressure on demand and lead to decreasing short-haul business fares in that part of the country.
  • A stronger US dollar has made the United States a more expensive destination for Canadian travelers and is causing demand for trans-border flights to drop accordingly. Fares are expected to decrease further in 2017, dipping between 2% and 5%. 


  • The impact of low oil prices continues to be felt across Canada. Calgary in particular is feeling the effect and hoteliers will struggle to achieve rate increases even if the price of oil improves in the near term. Overall Canadian hotel prices are expected to drop by 1.2% next year, with significant regional variation.
  • Edmonton hotels have fared reasonably well despite reduced oil and gas investment, due to construction activity following the devastating wildfires in Fort McMurray. Edmonton hotels should see the benefits of an improved economy sooner, with fewer new rooms in the supply pipeline.
  • A weak Canadian dollar continues to attract international conference delegates and overnight visitors to Vancouver, particularly during cruise season.
  • In Ontario and Quebec, manufacturing and exports have increased due to a weaker Canadian dollar and lower oil prices. The Toronto sector has enjoyed very healthy rate growth in 2016 and this trend is expected to continue in 2017. Montreal hoteliers are well positioned to enjoy increased occupancy and average daily rate.
  • Halifax hoteliers expect to benefit from an increase in economic activity in the shipbuilding and construction sectors. 


  • As in the U.S., ride-sharing competition will likely heat up with companies such as Uber and Lyft increasing market share. Investment in technology enhancements is critical for all brands across all regions to stay competitive with ride-sharing companies. As well, stricter regulations against ride-sharing services could eventually hinder profitability and eliminate some of the low-cost rides being offered.


Leave a Comment...

(will not be published)