AmEx Sees 2010 Travel Rates Increasing On Pent-Up Demand

Rates in most travel categories will rise slightly by the end of next year because of pent-up trip demand and supply changes, with particular improvement in business-class airfares, American Express Co. (AXP) said Wednesday as it released its latest travel forecast.

This year, weak demand for travel has pushed prices lower, particularly in hotels, which can't cut capacity as easily as air carriers or car-rental companies. But 2010 will see demand rebound as an accumulated need to travel and go to meetings spills over, according to the credit-card company's Global Business Travel Forecast.

AmEx doesn't expect airfares to decrease anywhere in the world next year except perhaps Latin America. Globally, it predicts as much as a 5% fare increase for domestic flights and a 6% increase for international.

Including airfare, hotels and ground transport, the average cost of a domestic business trip will rise 1.2% to $1,080 and an international trip will cost $2,818, 2.4% more, the forecast said.

American Express said companies will have more formal oversight of their meeting planning and spending and will loosen purse strings on events and conferences. However, it expects that value will be a prime focus in booking trips. In August, AmEx said corporations were still reining in travel spending and frequency last quarter, according to purchase information at its business-travel division.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]