New York City, Chicago See Dramatic Drop In Business Travel Costs
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It seems things have become more expensive for business travelers out there – unless they are conducting business in Chicago or New York City. That's according to first quarter results released by travel management company Travel Leaders Corporate weighting various business expenditures.
On a whole, there was a slight uptick in costs attributed to corporate travel. However, further digging found that the rise didn’t hold in two major U.S. cities. For the curious, TLC offers interactive graphs that illustrate how costs have fared over the duration starting as far back as Q1 2012.
For example, rental car costs rose from $38.88 to $38.93 from Q3 2015 when you consider domestic travel. That rise was more dramatic for airline and hotel costs, which rose $7.73 and $3.04 respectively.
Anyone planning a trip to a specific city is in luck, because TLC offers a glimpse of 25 U.S. cities and the trend in the costs for car transportation as well as hotel accommodations. As noted, every last city remained static or saw a nominal increase in the various costs – except for Chicago and New York City, which both enjoyed a nice decrease.
In what seems counter to how we have come to think of the popular destinations, they both featured a seven percent drop or better in their respective hotel costs. New York City is the big winner, which commands, on average, an 18 percent decrease and now rests lower than where averages were in 2013.
Image courtesy Travel Leaders Corporate
As you can see, hotel costs average just $213.69, which is markedly better than how things were at the close of 2015 and offered a shade better value than in 2013.
For Chicago, business expenditures for hotels are also on the decline to the tune of seven percent, or $147.16.
It’s a truly rare turn, especially when you consider items like air fare were up this previous quarter. It makes sense when you consider that it’s hard to bring conventions and meetings to frigid conditions no matter how amazing the location might be for tourism.
Corporate travelers see the winter months as an opportunity to discard some of those warmer clothes.
At least, that’s how Travel Leaders Corporate President David Holyoke explains the trend.
Holyoke does temper things, stating that there hasn’t been a dramatic increase in the industry: “The patterns that have developed for overall trip cost, as well as average per unit costs as a whole, have remained relatively consistent.”
Of course, there is the case of those pesky outliers: “However, hotel rates by city were extremely fluid in the fourth quarter. Two major cities, Chicago and New York saw significant drops, while cities like Miami, Phoenix, and Tampa were all up double digits. Each of these cities stuck to its historical pattern, but it was much more pronounced than in years past. The increased competition from leisure travelers in warm cities during the winter months helps creates this pattern.”
But if you enjoy the constant market, you have to love how things have played out internationally. While things remain stable, hotel and rental car costs in that particular sector are down while airfare is up just three percent.
Still, even those few points are lovely. The release notes this increase is still “the second lowest quarter of the last four years.”
Don’t go throwing a party just yet. Holyoke throws an obvious wrench into the mix: “However, the euro has regained some of its strength against the dollar, meaning there is slightly less cost savings. With the busy leisure summer months fast approaching for Europe, coupled with a steadier euro, I expect average international trip costs to continue to trend upwards.”
If you are in the camp who wants their news compiled into a synopsis, you can say the market has enjoyed a nice growth in the form of increasing prices. However, the industry still hasn’t figured out how to make the business traveler adore the sting of winter.
As history dictates, however, you will pay handsomely for New York and Chicago accommodations shortly.
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