Expected hotel rate increases have not materialized in key global markets, and prices are actually dropping in some places.
Here’s an overview:
- In North America and Africa, Advito has lowered the upper range for hotel rates. That means prices should not rise as much in 2017 as was anticipated at the start of the year.
- In the Middle East, softer demand is coinciding with increasing supply. The business travel consultancy now expects rates to decrease in Oman, Qatar, Saudi Arabia and the United Arab Emirates. The shift is from a previously predicted rise of 2% to 4% to a drop of -3% to -1%.
- A pickup in the economic cycle is driving increased international air travel, although performance is mixed in key domestic markets.
- Advito now forecasts a 2% jump in airfares for North America and the Middle East. In Latin America, intercontinental economy fares should drop 1%.
- Capacity expansion prompted by low oil prices pushed down average fares in many markets. Airlines now are trying to stabilize prices and may resort to capacity adjustments to raise airfares in 2017, Advito predicts.