Air, Hotel Rates Set to Rise in Latin America, the Caribbean in 2007

Continuing demand for corporate travel without a commensurate lift in supply will push costs higher across the board in 2007, according to the American Express Global Business Travel Forecast.

Air fares worldwide are expected to increase –though at a slower pace than in 2006 – while hotels rates will remain at heightened 2006 levels and surge in key business centers.

In Latin America and the Caribbean, improving economic conditions are expected to spur business travel growth, both domestically and internationally. High oil prices and increased passenger traffic will be somewhat offset by greater capacity and the growth of low-cost carrier competition.

Latin America and the Caribbean will likely experience increasing local and international travel, which will drive hotel rates higher, though results are expected to vary by country.

Domestic fares in the region will rise one to three percent, while international fares will climb four to seven percent, with Argentina and Brazil’s business-class fares showing the largest price increases.

Domestic fares in Mexico, however, are expected to decrease five to nine percent due to the rapid growth of low-cost carriers.

On the hotel front, rates in most of Latin America’s key business markets are expected to rise significantly, due to more travel to the region. Hotel rates should increase an average of two to four percent in the mid-range tier and two to seven percent in the upper-range tier.

In Argentina, rates are projected to climb four to six percent at mid-range properties and four to seven percent at upper-range properties. Similarly, rates in Mexico should climb two to three percent at mid-range properties and three to five percent at upper-range properties.