ALEXANDRIA, VA— The National Business Travel Association (NBTA) released its annual Business Travel Cost Forecast, which predicts costs will increase 5% in 2003, noting hotel rates will increase by 2%; business airfares will increase by 7%; and corporate car rental rates will increase by 2%. In 2002 travel costs increased, while the global economic slowdown and new security concerns caused corporations to cut spending, tighten travel policies and redefine supplier relationships. Corporations also turned to alternative suppliers and new technologies to get the best economic value from their travel purchases, noted the report. “Corporations have changed the way they purchase travel,” said NBTA President Kevin Iwamoto. “Moving into 2003, our forecast shows that business travel will resume as the economy recovers. Yet overall travel spending will remain flat in the coming year as corporations continue to focus on the bottom line.” Overall, hotel rates are expected to increase 2% in 2003. The report indicated while the upper end of the market has been impacted to a larger degree than midscale and economy hotels, both the limited-service and full-service hotel segments are expected to move towards recovery in the first half of 2003. However, the battle to retain customers has given corporations more negotiating power, and buyers are seeking longer-term contracts that will keep costs down in 2003. Growth in supply of hotel rooms has slowed over the past year, however, benefiting current suppliers by preventing new competition. Hotels in big cities were affected most by the downturn, with demand in the top 15 markets down nearly 8%, the report said.
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