Global hotel rates will climb while air fares remain flat in 2017; capacity driven by low fuel costs to offset increase in air demand, keeping ticket prices in check, projects Advito.
Global air fares should remain flat next year, while hotel rates are expected to increase by up to 5% around the world, according to business travel consultancy Advito’s newly released 2017 Industry Forecast.
Business class airfares will see a negligible rise of up to 1%, and economy fares will be largely unchanged. The factors: Even though demand is rising some, fuel prices remain low. That means airlines can add capacity while sustaining profitability. Travel buyers should expect greater variation in fares from region to region, according to Advito.
Look for business airfares to remain flat in Europe and Latin America, but expect increases of as much as 3% increases in Asia and the Southwest Pacific. Meanwhile, intercontinental economy class fares should fall slightly everywhere except Europe. Advito expects little change in regional economy class fares with 2% reductions in Latin America.
The consultancy projects hotel rates will increase in all regions in 2017, led by North America. Look for rates in the U.S. and Canada to climb by 3-5% with slightly smaller increases for hotels in Mexico. The Southwest Pacific and Middle East regions also will see a rise in hotel rates because of insufficient supply and strong demand. In Europe, a modest economic recovery and little new supply will push up rates by up to 2%, according to Advito.
The 2017 Industry Forecast predicts prices and travel-buying strategies for air, hotel, meetings and ground transportation worldwide. This year’s report also explores trends such as:
- Travel risk and security
- Hotel direct booking
- Alternative accommodations
- Ride hailing trends
- Artificial intelligence
- Airfare price restructuring
- Hotel mergers
- Hotel dynamic pricing
- Brexit’s effect on business travel
Advito, the consulting arm of BCD Travel, publishes its annual Industry Forecast to give travel and procurement managers a range of projected prices for business travel. They can use the projections to benchmark their corporate travel programs’ successes against key performance indicators and to prepare for supplier negotiations and budgeting.
Get more analysis and insights by downloading Advito’s 2017 Industry Forecast. Want to discover how to use the insights to improve your travel program? Talk to your BCD Travel account manager or email Advito at email@example.com.