The increase in prices in business travel is a reality that affects many companies. Here are the 5 main reasons behind the rise in prices and what measures you can take to avoid it:
1. Increase in CPI
The consumer price index (CPI) is a key indicator of widespread price increases. In Spain, the annual rate of change in the CPI in April 2023 was 4.1%, which directly impacted the prices of business travel.
2. Increase in costs associated with corporate travel
The GBTA and CWT’s Global Business Travel Forecast 2023 predicts an increase in all costs associated with corporate travel in 2023.
3. Increase in flight costs
American Express Global Business Travel reports a 5.5% increase in flight costs in Europe and a 6% increase in business travel in 2023. On the other hand, the INE points out that apartments had the highest increase in March, at 9.6%.
4. High demand for apartments
The increasing demand for corporate apartments has reduced supply and increased prices. The HousingAnywhere International Rental Index reveals that rental price increases are 11.9% for all types of properties from 2022 to 2023.
5. Price increases in specific cities
According to the HousingAnywhere Index, Munich recorded an annual price increase of 20% in 2023 and Amsterdam of 18.4%. Studio rental prices in Lisbon increased 51.4% this quarter. On the other hand, Barcelona has seen an annual increase of 7.5% in apartments and Madrid of 4.8%.
What to do about the rise in prices in Business Travel?
1. Consider costs and set an appropriate budget
Analyze transportation, accommodation, meals, and other expenses. Then, review your budgets and update them with current costs to make them more realistic.
2. Take advantage of frequent traveler programs
In case of facing flight fare hikes, take advantage of airlines’ frequent traveler programs.
3. Book in advance
Anticipating the check-in date can be an effective practice to get more competitive prices.
4. Travel less but for longer stays
A smart strategy is to reduce the frequency of trips by opting for longer stays. Consider renting furnished apartments near offices or strategic locations. This will allow you to save on transportation expenses and have a comfortable space to work during your stay.
5. Trust a specialist in business travel
Let a partner take care of the entire process for you. This way, you can save time and effort, and have greater control over your expenses.
In conclusion, although the rise in prices in Business Travel is a reality, there are measures you can take to reduce the costs associated with business travel. Research prices in advance and consider adjusting your budget for the price hike, book in advance, opt for longer stays, and trust a good partner.