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Airfares to inch up this year after cuts

Over the past few years, airfares for domestic flights in the U.S. have fallen as much as 7 percent a year. But that trend may be coming to an end.

A forecast by a global travel consultant predicts that airfares in North America rise 1 percent this year, while hotel rates will increase 2 percent to 4 percent.

BCD Travel, a consultant that works with corporate travel managers, attributed the expected airfare increase to fuel costs and strong demand. The percentage of filled seats on each flight  known as the load factor  has also been at near record-high levels.

"High load factors may encourage airlines to pursue the fare increases they need to offset rising fuel and labor costs," the forecast said. "Prices are climbing slowly in the markets with the strongest demand."

BCD predicts that hotel rates will rise modestly this year partly because of the increased pace of hotel construction, especially in mid-scale and upscale tiers.

"Demand has been steady but not spectacular," the report said.

BCD's fare forecast is directed at corporate business travelers who often get special group rates, but industry experts say corporate rates generally parallel fares for regular travelers.

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