Airfares Expected to Rise: Travel Price Outlook
Travellers can expect airfares to increase next year, at least according to a new joint 2015 Global Travel Price Outlook report released by Carlson Wagonlit Travel (CWT) and the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA).
The report gives an early indication of what businesses can expect in 2015, helping them plan ahead during the upcoming budgeting period.
The report highlights that demand from emerging markets such as China, India and Brazil and improved economic growth in advanced economies, combined with limited advances in travel supply, will result in an upward pressure on rates, particularly in high-demand travel markets. The study shows that travel managers are prepared for this, however, with those surveyed by GBTA expecting airfares to increase most among all categories due to consolidation in major markets.
“With business travel prices on the rise, this study is the key to effective budgeting,” said Christophe Renard, vice-president, CWT Solutions Group. “Working with the GBTA Foundation has allowed us to share best practice, industry knowledge and expertise to create a wide-ranging look at the year ahead.”
“The study reveals that travel managers expect price increases next year across the board on travel categories including airfares, hotel room rates and rental car rates,” said Joseph Bates, GBTA Foundation vice-president of research. “Risks to the forecast including the escalating Ukrainian crisis; declining European inflation; burgeoning debt in China and oil price shocks could potentially have a negative influence on travel demand and pricing however, so travel managers are advised to consider contingencies for these risks in their planning.”
Air: With rising demand, favourable cost structures and slowly expanding capacity, airfares are expected to rise gradually through 2015, by as much as 2.2%, although low-cost carriers are limiting price increases in some regions. Latin America will see the highest price increases of any region advancing 3.5%, while price growth in Europe will be much more modest.
Hotel: Hotel suppliers will be in a better negotiating position than they have been for some time in 2015, due in part to stronger demand and investor interest, and favourable capital costs. This improved outlook could lead to greater pressure on negotiated rates for travel managers and buyers, and globally, prices are expected to rise by as much as 2.6%.
Price growth will be led by Latin America, with an expected 6.3% increase in managed rates. Hotel prices in North America and Asia Pacific will see moderate growth, while hotel rates throughout EMEA will grow more slowly than the global average throughout 2015.
Ground: In contrast to the air and hotel sectors, the ground transportation industry has an abundance of supply. With industry consolidation and strong competition, global prices are expected to remain flat throughout 2015.
Meetings & Events: Compliance will remain a concern for the meetings & events sector next year, regardless of industry or geography. While there are some exceptions by country, there are several trends expected across the industry in 2015, including a rise in the use of social technology.
Travel Pricing in Canada: Looking to Canada specifically, buyers should prepare for air prices to increase by 1.5%, while hotel prices increase by 1%. Ground transportation is expected to remain flat.
To view the report in full, visit http://www.carlsonwagonlit.com/en/global/insights/global-forecast-2015/index.html .