Business-class airfares for regional travel will increase 2% during 2019, while fares in other segments rise by 1%, according to adjusted predictions in BCD Travel’s Industry Forecast Update, the companion report to the 2019 Industry Forecast.
Air travel costs are rising despite lower-than-expected oil prices. BCD now foresees oil at US$65 per barrel, lower than the original forecast of US$75 per barrel.
Hotel rates are set to rise 1% to 3% this year, a prediction that has not changed since BCD released the original Forecast in September.
Mike Eggleton, senior manager of Analytics & Research for BCD Travel and author of the Forecast, said current indictors signal change ahead: “Travel buyers need to be prepared, paying close attention to developments in the economy and in the air and accommodation sectors.”
What to look for in 2019
Global air travel demand has eased in recent months, coinciding with signs that global economic growth is slowing. Airlines can manage capacity to offset some of the effects. But soft demand plus too much capacity could lead to lower fares and better corporate discounts in the second half of 2019.
The global hotel rate outlook for 2019 remains largely unchanged in most markets. The Middle East is an exception. BCD lowered predicted rate increases for Saudi Arabia and the United Arab Emirates because of oversupply.
As global economic growth slows, the fear of weaker demand is topping previous concerns about oil supply disruption. Brent crude spot prices dropped by 29% from October to December. The price is above US$70 a barrel now, but it’s likely to slide back to the US$60-70 range.
Produced by BCD’s Research & Innovation Team, the Industry Forecast and Industry Forecast Update provide business travel data, trends and analysis. Corporate travel buyers can use the Forecast to understand how the economy, technology and global events affect business travel. BCD’s 2020 Industry Forecast is scheduled for release in September.