New York (Global Adventures): American Express Business Travel sees a modest increase in airfares and says that travelers appear to be moving back to the front of the plane, showing positive signs companies may likely be feeling more optimistic about the economy. International and domestic airfares paid from North America increased quarter-over-quarter. However, they continue to be down measured year-over-year.

Average international airfares paid increased two percent quarter-over-quarter, according to the Business Travel Monitor (BTM) North America. Average domestic airfares paid increased two percent quarter-over-quarter.

From a hotel perspective, rates varied across hotel categories quarter-over-quarter, but overall average rates decreased both internationally and domestically. In looking at individual hotel tiers, rate increases were evident in budget, economy and mid-tier categories. Average international booked hotel rates decreased 10 percent year-over-year, while domestic booked hotel rates decreased two percent over the same time period. However, hotel in the budget-tier increased seven percent quarter-over-quarter, properties rated as economy managed to increase room-rates by 1 percent, and mid-priced properties sold rooms at prices that were 2 percent higher.

“While economists watch key market indicators such as inventory levels and unemployment, we may be seeing a glimmer of economic hope as the Business Travel Monitor data shows modest fare increases and travelers moving to the front of the plane again,” said Christa Degnan Manning, director at eXpert insights. “This is an encouraging sign for the business travel industry because it indicates increasing demand as well as willingness to pay for premium products, which help with supplier profitability and their ability to provide consumer discounts.”

“Pent-up trip demand coupled with supply base changes have caused rates to slightly increase in the third quarter,” according to Manning. “There has also been a slight increase in the usage of business class tickets for international travel, up one percent from last quarter, to 37 percent. However, this is still down year-over-year from 49 percent of all international business traveler tickets purchased.”

The continued drop in demand has impacted both international and domestic hotel bookings. “Since hotels cannot reduce capacity as easily as air or ground transport providers, this drives rates down, and the effect will likely continue through the first half of 2010. However signs point to an increase in demand from the bottom up, where rates have notably increased up to seven percent in lower hotel tiers, driven by a positive up-tick in demand from travelers wanting to travel, yet doing so more cost-consciously,” said Manning.

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