INDUSTRY FORECAST 2019
by BCD Travel research & intelligence team
Global hotel rates to increase 1-3% and air fares by 1-2% in most markets; strong competition to check increased demand for regional fares.
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Economic growth to lose momentum
to rise by 1% globally
Hotel rates to increase by 1% to 3%
Oil prices to hold steady at US$75 per barrel
Average ticket prices
While 2018 will be another year of above-trend growth for global air travel, the pace of expansion in demand is slowing.
Traffic grew at 7.0% year-over-year during the first six months of 2018, down from 8.3% a year ago.¹
Last year’s boost to demand from lower airfares is fading, and a moderation in economic activity is weighing on some markets.
Demand is still strong enough for airlines to respond to higher fuel and labor costs by raising average yields, without yet resorting to increases in published fares.
¹ IATA Air Passenger Monthly Analysis, June 2018
Global hotel rates will increase by 1% to 3% in 2019, as demand growth remains just ahead of supply in most markets.
There is little regional variation in our forecasts, with rates expected to rise by either 0% to 2% or by 1% to 3%.
Much stronger increases are expected in some countries, such as India, where we forecast a 6% to 8% rise in rates.
Lower rates are most likely in African markets, particularly in Ethiopia and Morocco.
Mounting trade tensions and higher oil prices will cause global economic growth to slow in 2019.
Advanced economies will be most affected, with Europe and North America losing some momentum.
But 2019 will be another good year for emerging markets.
Latin America is set for a much stronger performance, while growth will also continue to improve in Africa and the Middle East.
² Oxford Economics, July 2018
World economic GDP growth
Regional economic growth 2017-2019²
OPEC has the spare capacity needed to step in and stabilize the market should growth in global oil demand be stronger than expected in 2019.
Oil prices should therefore be little different to the US$73 per barrel currently expected for 2018.
OPEC may also need to respond to less supply from Iran, Libya and Venezuela.
Any delay in making up the supply shortfall could push up oil prices for a time, and so we have assumed an average oil price for 2019 of US$75.
Brent crude spot price per barrel (US$)