Country-specific, rather than global, economic trends are expected to contribute to a slight uptick in business travel prices within specific regions next year, according to the American Express Global Business Travel Forecast 2014.

Brazil’s preparation for global sporting events, Germany’s relative economic strength within the Eurozone, and China’s slower but stabilising growth will determine the rate of increase next year, with Asia Pacific (APAC) seeing the highest rate increases compared with North America and Europe.

Globally, supply-side dynamics including more low cost carrier options, weaker demand for business class air travel due to more stringent corporate policies and lack of new hotel construction (or oversupply in some areas) across specific regions, are expected to have an impact on pricing changes.

The report said APAC’s rate increase, largely driven by China’s slower but ongoing growth, will be across across most categories.

APAC’s air routes will experience sustained demand in 2014, and published airfares will likely increase in most countries. However, there are a few notable exceptions:

• Australia’s long haul economy is likely to decrease by up to -5%, partly due to increased competition from Asian carriers
• China short haul where high-speed trains provide an alternative travel method.
• Japan, where low-cost carriers and a weaker Yen are likely to contribute to stable or slightly decreasing airfares.

Andi Budd, vice president and general manager, American Express Global Business Travel, Singapore, Thailand & Taiwan said, “While growth is slowing in some local countries, the Asia Pacific region is leading the rest of world in terms of economic growth. Business travel is still a priority in this region and rates are likely to rise modestly across air, hotel and ground transport in 2014.

“Economically, Singapore and Hong Kong continue to be heavily reliant on the financial sector in which spending on business travel remains conservative. Coupled with increased competition from low cost carriers in these countries, we are likely to see minimal increases in long haul airfares.”

Hotel rates across APAC are expected to see increases as the region continues to grow economically, and supply is not expected to outstrip demand in most locations. The exception is India where hotel supply is high, as is competition between hotels, and slight rate declines are expected.

“Singapore remains as one of the top destinations for the rapidly growing base of Chinese tourists. We expect high-end hotel prices to remain largely unaffected. However, more mid-tier properties continue to open in hope of capturing some of the increased demand that continues to keep overall occupancy levels high,” said Budd.

Car rental prices are expected to increase slightly due to expected growth within the region. However, across APAC chauffeurs and public transportation, including trains, will likely continue to be more popular and practical for local transportation in most cases.

Subdued economic growth outlook for 2014 does not support predictions for large increases in demand for business travel next year. As a result, anticipated changes in supply will likely have a greater influence on the cost of business travel than demand.

“As costs are anticipated to rise in 2014, it is more important than ever for companies to ensure their travel investments are allocatedto support the achievement of their overall business objectives,” Budd added.