Despite Rising Hotel Rates, Business Trip Costs Fall

February 8, 2017 Michelle Devera

Business trip costs

If you did any business travel during the fourth quarter of 2016, it looks like you got a deal, depending on your destination.

According to Travel Leaders Corporate’s 4Q16 Data Trends report, the overall cost for domestic and international business trips—air, hotel and car rental—continued to decline.

– Cheapest quarter for business travel: The average cost of a U.S. business trip in 2016’s fourth quarter—air, hotel and car rental—dropped 4 percent, from $980 to $945. Internationally, trips for work cost an average of $2,167, an almost 17 percent decline over the same period in 2014.

– Cheaper hotel rooms: At $151, the average U.S. nightly rate decreased over the third quarter. Abroad, average rates also fell to $179.

– Cheapest quarter. Period: The average price of a domestic trip for the fourth quarter is the second-consecutive quarter that costs have fallen. It’s also the lowest it’s been since 2013.

Thanks to a few key factors—stronger U.S. dollar, cold weather patterns, the traditional business travel slowdown—the fourth quarter generally remains the cheapest time to take a work trip.

“There is a natural cycle in business travel, whereby the fourth quarter is typically slower than the rest of the year,” Travel Leaders Corporate President Gabe Rizzi said. “However, for those companies who continued to invest in travel, they experienced far greater returns based on the overall costs.”  

There are a few outliers to this overall downward cost trend:

– Hotel rates jumped in top U.S. destinations. Average nightly hotel rates in 22 of the top 25 U.S. markets went up over the past three years, with weather directly impacting northern and southern cities.

In Florida, for example, the hotel price per night rose an average of 15 percent over the third quarter of 2016 in Fort Lauderdale, Miami, Orlando and Tampa. Conversely, up north, Minneapolis had the largest decline, with hotel prices down 20 percent over the third quarter of 2016.

– Offsetting higher hotel costs with shorter stays.

– Car rental rates saw a slight increase. The national daily rate average ticked up about 3 percent, especially in the most popular destinations, with rate increases in 15 of the top 25 markets.

Looking ahead, Travel Leaders Corporate predicts that slight hotel cost increases will continue domestically and in Europe.

See the detailed analysis here:!/


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