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A variety of factors have made traveling abroad cheaper for business travelers, but the savings have been undermined by expensive airfares and pricy hotel rates in the U.S., according to new data from Travel Leaders Corporate.
The data, which comes from a survey of more than three million reservations, shows that a strong U.S. dollar is a mixed-bag for business travelers and the corporations they work for.
“On one hand, it does offer purchasing power for business travelers in terms of their overall trip cost,” said David Holyoke, president of Travel Leaders Corporate. “Interestingly though, a strong U.S. dollar can have a negative impact on the overall global economy and international growth. While the overall trip cost may be lower, profits for many multi-national companies are expected to fall this quarter. S&P 500 companies’ profits are expected to be down roughly four percent in the third quarter, which could impact the economy and business travel in the long run.”
Here are four takeaways from the report.
Domestic hotels are expensive, but international hotels are cheap
Average spending on domestic hotels is at a five-year high of $154.16, an increase from the low over that period of $138 in Q1 2012. International hotel spend, however, is now rising slowly after hitting its lowest average in the last five years in Q1 2015.
Airfare is slowly getting booked closer to the date of travel
There’s been a three percent increase the amount of corporate airfares booked from zero to six days out over the last three years, according to Travel Leaders’ data. More than a quarter of business trips are now booked within a week of travel for the first time.
Average cost per ticket shows that the disparity in price between advance booking periods is actually quite small, except for trips booked more than three weeks in advance.
“There’s less urgency to buy further in advance because of [airfares] softening,” said Holyoke.
International airfare is getting cheaper
The cost of both domestic and international airfares declined over the last quarter, with international airfares hitting a five-year low of $1,573.76. Domestic air costs, though, are about average for the last five years.
“Airfares are down overall compared to last year due to falling oil prices,” said Holyoke.
Domestic business trip cost is skyrocketing, while international trips are more affordable
The average domestic business trip cost in Q3 2015 was $1,019.45, a slight decrease from Q2 but still close to historic highs; the same cost in Q3 2012, for instance, was $933.40.
International trips, however, averaged a four-year low of $2,365.73. But as the data sho, trip cost appears cyclical and may be primed to bounce back up next year.