2015 will be more expensive
Does your business require shipping, travel, or coffee? That’s too bad – you’re looking at spending more money in 2015, and we hope you’ve budgeted properly. Although gas prices have hit a four-year low and consumers are feeling positively about that, the savings will be made up for elsewhere, we promise.
In your personal life, you should start setting aside some chocolate, bourbon, and bacon (prices are set to spike on those luxuries this year), but for your professional life, you need to brush up on what this year holds for price spikes.
If you breathe and live in America, you probably drink coffee, and if you travel for business, you are a pro at racking up your Starbucks rewards points. The average American worker drinks $20 per week of coffee as of 2013, and prices were expected to drop last year. But they didn’t.
No, Brazil had a nasty drought, and since that’s where the majority of the globe’s coffee comes from, prices went up on brands like Starbucks, Gevalia, Folgers, Maxwell House, and even Dunkin’ Donuts. Further, K-Cup prices by Keurig have already jumped, and Kraft Foods recently announced a 9.0 percent increase for their single-serve K-Cup packs by Maxwell House, McCafe, Gevalia, and Yuban.
2. Shipping costs
In 2015, UPS and FedEx will be increasing prices, implementing a dimensional weight pricing structure, wherein packages of all size are priced based on the amount of space the package occupies as it relates to its weight.
At the end of December, UPS prices rose 4.9 percent for all ground, air, international, and freight services in the U.S., Canada, and Puerto Rico.
This week, FedEx prices also rose 4.9 percent for all domestic, import, and export services in America, as well as for FedEx Home Delivery and FedEx Ground services.
Tim Leffel, author of The World’s Cheapest Destinations said, “For hotels, business travel is up and unemployment is down, so rates will continue to tick up.”
Analysts forecast that hotel costs will rise 2.2 percent for international travelers, with a 3.5 percent increase in North American nations alone. Anyone traveling to Latin America should save up – hotel room prices are expected to rise 6.5 percent this year due to a shortage of rooms.
4. Air travel
The American Express Global Business Travel Forecast for 2015 indicates a 6.0 percent increase in prices for short-haul business flights, while the Global Business Travel Association predicts a 2.2 percent increase in prices for business air travel globally, and a 2.5 percent price increase within North America, and a 3.5 percent spike in cost for travel to Latin America.
Expect fewer flight bargains this year as the economy improves. Many are annoyed that gas prices are plummeting, but air travel isn’t following suit, and some are crying foul, but airlines don’t pay for jet fuel tank by tank like consumers do, rather they buy futures and hedge their bets (in this case, it was a good bet – in 2012, there were some bad bets). Jet fuel is expected to fall 17 percent in cost by the end of the year, but that will go toward profits, not bargains for you, friend.
5. Health care
Medical costs are expected to rise a whopping 6.8 percent in 2015, according to PriceWaterhouseCooper which also reports that 85 percent of employers are implementing or considering implementing increases in employee cost-sharing within three years. One in five employers now offer a high-deductible health plan as the only option for employees.
For those insured under the Affordable Care Act that aren’t looking at plan options before the open enrollment period ends on February 15th, a 20 percent increase for health insurance might be coming their way. Further, AARP reports that prescription drug prices will continue rising dramatically.
It’s not all bad news
The truth is that 2015 is going to cost a lot more for companies with traveling teams, but for those staying put, several business expenses are actually expected to go down – cloud storage, smartphones, smartwatches, software, and even many hardware options. So while technologies get less expensive, travel gets more expensive. If only there was a way to travel less and use technology more…