American Express

American Express

October 25, 2005 11:30 ET

Strong Business Travel Recovery to Continue in 2006, According to American Express Business Travel Forecast

NEW YORK--(CCNMatthews - Oct 25, 2005) -

American Express:

-- Growing Demand, Higher Fuel Costs to Drive Air and Hotel Rates Higher Worldwide

-- 2006 Outlook for Corporate Travel Buyers Challenging in Rising Price Environment

American Express Business Travel, the world's largest travel management company, released today its 2006 Global Business Travel Forecast that indicates strong price increases in the global business travel industry and suggests a more challenging corporate travel buying market in the year ahead. The comprehensive analysis forecasts both airfare and hotel trends as well as published price predictions for the coming year regionally and globally. The 2006 Global Business Travel Forecast is made available annually to American Express Business Travel clients and is generated by American Express Consulting and eCLIPSE Advisors, a unit of American Express Business Travel. For the complete press release with regional data, please visit www.AmericanExpress.com/corp/pc/press_center.asp.

Global Overview and Highlights

Although the pace varies significantly by region and country, published air and hotel prices worldwide are expected to rise considerably next year as business travel demand recovers in step with the global economy, outpacing the growth of supply in many markets. Regions of strong business travel demand include Europe, North America and Japan, Asia-Pacific and Australia (JAPA), with significant traffic in the trans-Pacific and trans-Atlantic markets. Published air and hotel rates will increase as suppliers feel intense pressure to recover losses, soften the effect of skyrocketing fuel costs, and in some cases even grow profits. While pricing pressure remains across the airline industry, continuing competition from low-cost carriers may limit airlines' ability to raise fares in many markets.

Globally for 2006, American Express Business Travel forecasts domestic/short-haul, economy class fares will rise by three to six percent and international/long-haul business fares increasing by three to five percent. On the hotel side, room rates overall for mid-range properties will increase by one to three percent, while upper-range properties will increase by three to five percent.

"Corporate clients are traveling more, and increased globalization is leading to strong demand for long-haul air travel and hotel space at their travelers' destination. Whilst global fares are rising across the board there are significant variations by region and even the countries within those regions," commented Matthew Davis, Director of Global Consulting at American Express.



Forecasts for increases in specific regions are as follows:

American Express' Regional Forecasts for Global Business Travel Prices
in 2006
----------------------------------------------------------------------
Region Published Air Fares Published Hotel Fares
----------------------------------------------------------------------
Domestic / International / Mid-Range Upper-Range
Short-Haul Long-Haul
(Economy (Business
Class) Class)
----------------------------------------------------------------------
North America 5 to 8% 2 to 6% 0 to 3% 2 to 5%
----------------------------------------------------------------------
JAPA 2 to 3% 3 to 4% 3 to 4% 5 to 6%
----------------------------------------------------------------------
Europe 0 to 4% 4 to 6% 1 to 3% 2 to 4%
----------------------------------------------------------------------
LA&C 2 to 5% 4 to 7% 2 to 4% 3 to7%
----------------------------------------------------------------------
GLOBAL 3 to 6% 3 to 5% 1 to 3% 3 to 5%
----------------------------------------------------------------------



Methodology

Projections were based on a combination of statistical forecasting, in-depth research of supplier markets, regional economic trends, interviews with American Express industry analysts, and analyses of reports generated 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 Business Travel, a division of the American Express Company, is dedicated to helping its customers realize the greatest possible value from their investment in travel through increased cost savings, outstanding customer service and greater spend control. For small businesses, medium-sized enterprises and multinational corporations, American Express Business Travel provides a combination of industry-leading booking technology, travel management consulting expertise, strategic sourcing and supplier negotiation support and customer service available around the world, around the clock, online and offline. American Express operates the world's largest travel agency networks, recording nearly USD 20 billion in worldwide travel sales in 2004.

American Express is a leading global payments, network, travel and banking company founded in 1850.

For the complete press release with regional data, please visit www.AmericanExpress.com/corp/pc/press_center.asp.

American Express acts solely as sales agent for travel suppliers and is not liable for the actions or inactions of such suppliers. CST# 1022318-10, TA# 002- Registered Iowa Travel Agency, NV# 2001-0126, ML#1192, Washington UBI# 600-469-694

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