Air travel demand to strengthen throughout 2014
Advito releases update to 2014 Industry Forecast for business travel
Copenhagen, June 17, 2014 – In the latest update to its 2014 Industry Forecast, travel consultancy Advito projects robust global air travel demand growth to continue, or even strengthen through the year. Global economic recovery is supporting this growth, but there remains regional variation in the strength of demand and in the airlines’ response to it, forecasts Advito.
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:
- With only slight growth in demand this year, and little new capacity added, airfares in North America are holding steady. Advito forecasts that intercontinental business and economy fares will rise by 1% year-over-year. Regional business fares will be flat, as transcontinental expansion by JetBlue and Virgin America increases competition, but economy fares are still expected to rise by 2%.
- While demand across Latin America remains strong, there are early signs of a loss of momentum, as fears of an economic slowdown emerge. Advito is maintaining its forecasts for intercontinental fares at 4%, and for regional business at 2%, but lowering the figure for regional economy from 5% to 3%.
- Low-cost carriers’ pursuit of corporate travelers in Europe will keep regional business fares flat. And in Asia, increasingly price-sensitive customers and an influx of low-cost carrier capacity mean falling regional and intercontinental fares.
- Advito updated hotel forecasts for two regions. Stronger market conditions have continued to provide upward momentum to hotel rates in Mexico, resulting in a rise in Advito’s North American forecast from 2-4% to 3-5%. In Asia Pacific, increasing hotel capacity has coincided with a softer economic outlook. This is most noticeable in India, where Advito once again predicts a fall in hotel rates.