- Tags : Travel & Fleet | Corporate Travel Services | Price trend | Price forecast | Procurement research | Category market forecast
Recent Price Trend - Corporate Travel Services
During the three years to 2017, the average price of corporate travel services has remained relatively flat, rising at a marginal estimated annualized rate of 0.2%. Although the recession took a toll on corporate buyers, the number of work-related trips has slowly climbed in recent years following the rebounding economy, boosting demand for this market's services and hurting buyer power. The number of both domestic and international trips by US residents have climbed during the past three years, boosting demand for travel services, including that from business buyers. Additionally, the number of employees has risen during the period, indicating a larger pool of people who could be sent on work-related trips. Ultimately, these factors have contributed to higher demand for corporate travel services, which has helped pressure market prices upward, to buyers' detriment.
However, lingering uncertainty as the economy slowly recovers has mitigated such boosts in demand for corporate travel services. For example, corporate profit has fallen during the period, constricting businesses' travel budgets and weakening demand for outsourced travel booking and management services. As a result, travel agencies have offered discounted prices to clients, slowing the rate of price growth in this market.
Additionally, supplier input costs have largely kept prices from growing at a faster rate as well. Although overhead costs, particularly the price of office space rentals, have been rising somewhat, total wage costs have been falling as suppliers seek to replace low-skill employees with automated mobile and online booking processes. As such, suppliers have not been able to raise their prices significantly without losing business to their competitors.
Buyers have also benefited from minimal year-on-year price volatility during the past three years. The low level of price volatility has allowed buyers to better integrate purchases of this market's services into longer-term budgeting plans. In general, when travel agent service fees rise, corporations find it less affordable and attractive to source third-party services. Without fear of any major price swings in the near future, buyers have time to evaluate their travel needs, and aggressive market competition allows buyers to shop around for the best price possible.
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