Advito releases 2016 Industry Forecast for business travel

Low oil prices, increased capacity keep airfares relatively flat.

Prices for business travel will remain stable in 2016, according to travel consultancy Advito’s just-released 2016 Industry Forecast. 

In 2016, Advito expects global economic performance to accelerate as both emerging and advanced markets grow. But economic risks like the Greek debt crisis or the sluggish Chinese economy could derail this outlook.

Air

Stable oil prices and increased capacity will keep airfares essentially flat. The supply increase ensures that air fares won’t rise in most markets, and may even go down in regions where competition is most intense. Airfares could rise or fall very quickly, however, if oil prices go up or down.

“While we expect global airfares to remain flat in 2016, corporate travel buyers should expect some regional variation in pricing.” said Inge Stock, Director EMEA at Advito. “More than ever, air market conditions vary by route. So it’s especially important for companies to understand precisely where they’re spending the most and whether cheaper alternatives exist.”

Business fares will be stable in North America, Europe and Asia, but they’ll fall by 2% to 3% for intercontinental travel in the rest of the world. Economy fares will fall in most markets, with the biggest decreases likely in Africa and the Middle East. They should only increase in North America and Latin America in response to strong demand for regional travel in these markets.

Hotel

As demand recovers in North America and Europe, a lack of new supply will help hotels increase prices. Rate growth will also be strong in Latin America, reflecting the continued strength of demand. However, widespread openings, particularly in China and India, will ensure lower average rates prevail in Asia.

Trends: Lufthansa & Airbnb can lead to changes in travel policy

Lufthansa Group has caused a big change in the air sector by introducing a € 16 surcharge for global distribution system (GDS) bookings. Travelers and agents can avoid the fee by booking direct with the airlines. But that will lead to out-of-policy bookings, and complictes services like duty of care and crisis management support.

In the hotel sector, Airbnb is in the spotlight: over the last year they have signed up more than 250 companies to its business travel program. Despite their efforts to increase appeal to travel managers, they still face challenges around safety, regulation and taxation. Advito expect Airbnb to come with a solution, but also hotel chains may develop similar products, increasing marketing competition.

Click here to download the complete forecast.

On Tuesday Sptember 15, Bob Brindley, Advito Vice President & Principal, and Mike Eggleton, Advito Senior Market Analyst, will present the Advito Industry Forecast during a free ACTE webinar. Click here to register for free.

 

 

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