Airline Travel Takes Off

July 19, 2011

amex-airline-spend-july-2011.JPGOverall airline spending [pdf] increased the most of any travel category tracked by American Express Business Insights (8.4%) in Q1 2011 compared to Q1 2010, fueled by a 14% surge in corporate airline spending. Average consumers followed with a 4% increase, slightly beating out the highest-spending ultra-affluent consumers, who increased their airline spending 3.3% compared to a year earlier.

While total airline spending for all groups increased 8.4%, transaction volume decreased 1.8% during Q1 2011.

Fliers Fly Frequently

American Express data shows that those who flew seemed to do so frequently, as 90.8% of ultra-affluent consumers made three or more transactions and 74.6% of average consumers made 3 or more transactions during Q1 2011.

February Fit for Flying

February showed the largest jump in airline spend, increasing by 9.5%, while January and March followed with increases of 7.3% and 8.3%, respectively.

Car Rental Spending Brakes

amex-car-rental-spend-q1-11-july-2011.JPGCar rentals showed minimal change across all segments, with corporate spend increasing the most at 2.2%. Small businesses also showed slight improvement with a 0.9% increase, while ultra-affluent and average consumers stayed off the road, decreasing spend by 2.6% and 1.6%, respectively.

Average car rental transaction size increased by 2.6% and transaction volume decreased 2.3%, netting out to an overall spend increase of just 0.2% for this category. Of the ultra-affluent consumers who spent on car rentals in Q1 2011, 50.5% of them spent in three or more transactions compared to only 34.5% of average consumers.

March Drives Car Rental Increase

March proved a popular month to hit the road with overall spending increasing by 3.4%, while January and February posted a decrease of 1.5% and 1.6%, respectively.

Smaller Wallets Keep Cruises Afloat

amex-cruise-spend-q1-11-july-2011.JPGCruise spending was restrained in Q1 2011, with overall spend increasing by just 2.6%. Average consumers and small businesses led spending in this category with increases of 2.8% and 2.9% respectively. Ultra-affluent consumers increased spending by 1.1%, while corporate spending decreased by 1.8%.

Overall transaction size for cruise spending increased by 2.5% in the quarter, while transaction volume increased by 0.1%.

Feb. Doldrums Inspire Cruisers

February proved to be the most popular month to set sail, with overall spending increasing by 5.1%. January and March followed with spend increases of 2.2% and 1.1%, respectively.

Cruise Patrons Skew Older

Consumers age 66 and up accounted for 36.5% of all cruise spending in Q1 2011, compared to those age 26 to 35, who made up only 4.6% of all cruise spending during this period.

Barbell Affect Hits Lodging Spending

amex-lodging-spend-q1-11-july-2011.JPGEconomy lodging was favored by all groups in Q1 2011, with overall spend increasing by 14%. Echoing the barbell effect, luxury lodging spend was close behind with a 7.5% increase, showing businesses and consumers alike spent at extreme ends of the spectrum. Upscale and midscale lodging spend increased by just 3.2% and 1.2%, respectively.

Ultra-affluent consumers increased spend on economy lodging by an impressive 19.6% during the quarter, compared to an increase of 3.8% on luxury lodging. Average consumers splurged a bit more than their ultra-affluent counterparts by increasing spend on luxury lodging by 5.7%, but economy lodging still remained the preferred choice for this group at a 7.4% spend increase.

Lodging Spend Stays Steady by Month

Overall lodging spend remained consistent across the quarter. While February jumped 3.8%, January and March were not far behind with spend increases of 3.7% and 3.3%, respectively.

Domestic Air, Hotel Rates Climb

During Q1 2011, domestic airfares pushed past the pre-recession levels of Q1 2008 and hotel rates are on the rise, according to previously published American Express Business Travel data. Average domestic airfares increased 10% year-over-year compared to Q1 2010 to $247, surpassing the pre-recession average of $233 in Q1 2008 by 6%.

Meanwhile, domestic hotel rates climbed 3% year-over-year in Q1 2011, from $146 to $150. Compared to Q1 2008, they are down 1% from $152.

About the Data: American Express Business Insights leverages proprietary data from 90 million global American Express cardholders.


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