Prepare to pay much more for flights and accommodation next year.

AIRFARES and hotel prices could rise by as much as 10 per cent next year, according to annual forecast figures compiled by American Express Business Travel.

Domestic airfares are expected to increase by between 5 per cent and 10 per cent, while business-class fares on long-haul international routes are likely to have similar increases (the forecast does not include economy-class pricing for long-haul routes).

Mid-range hotels in Australia are expected to increase their rates by between 2 per cent and 7 per cent next year, while hotels in the upper range could add as much as 10 per cent.

"Pricing power has swung back to air and hotel suppliers for the first time in two years, in 2011," says a spokesman for American Express Business Travel, Robert Tedesco.

He says there will be more competition for limited seats on planes and hotels will enjoy increased occupancy levels, leading to higher rates.

Leisure travellers feeling the sting of the increases have corporate travellers to thank, with demand for business travel driving the rises.

And the Asia Pacific region is expected to lead the way, thanks to "dramatic" economic growth.