ADVITO – 2014 Industry Forecast March Update for Business Travel
Air travel demand has moderated but growth expected in 2014.
Copenhagen, March 11, 2014 – Global economic growth will regain momentum this year, with advanced economies driving this change, forecasts travel consultancy Advito. In the latest update to its 2014 Industry Forecast, Advito projects that travel demand will follow this positive growth trend, though at a slightly slower pace than the overall economy.
Growth in air travel demand remained solid throughout 2013 but has recently moderated, according to Advito’s update. This year, fares will vary by region due to airlines’ differing approaches to keeping aircraft full.
Advito, the consulting arm of BCD Travel, continually monitors changes in economic growth, inflation, travel demand and oil prices. Each quarter, it revises its annual Industry Forecast to highlight subsequent updates to the original air and hotel pricing predictions.
The update and the original Advito 2014 Industry Forecast are available at www.advito.com (in the Resource Center section under “White Papers”). Following are a few of the update’s key findings:
- Bringing it in line with its forecast for business fares, Advito lowered its earlier projection for intercontinental economy fares in Europe, from 2% to 1% as demand continues to lag capacity growth.
- Demand continues to outpace capacity in Latin America, pushing up prices on airfares. Based on that observation, Advito raised its forecast for intercontinental economy fares in Latin America from 2% to 4%.
- Excess air capacity on Middle Eastern carriers is pushing down prices for intercontinental business fares in Africa, and Advito expects prices for those fares to continue to fall by 3%. Advito is sticking with its original forecasts for regional fares in Asia, which should drop 4% for business class and drop 2% for economy. The decline results from customer down-trading and a rise in low-cost carrier capacity.
- Hotel forecasts for most regions remain unchanged. Based on higher than expected growth in hotel capacity, Advito adjusted its regional hotel forecast for the Middle East downward, dropping it from the original 2-4% to 1-3%. Advito also adjusted its projections for average daily rates (ADRs) for some individual markets. The update now forecasts lower ADR increases in Qatar and Spain and higher increases in Argentina, Luxembourg and Mexico.