Mike Eggleton, Director of Research and Intelligence at BCD Travel, shares why we’re not producing an Industry Forecast for 2023.
Forecasting is riskier than ever due to market uncertainty, volatility and variability. Instead, he’s providing inflation forecasts for clients’ key markets. It’s a simple approach giving travel managers at least some credible numbers to use in their budgeting.
Read our Travel costs – outlook and market update on the outlook for travel costs.
Hi there. I’m Mike Eggleton, Director of Research and Intelligence. Many of our clients have been asking what’s going to happen to air and hotel pricing next year? Some people have even asked me when the next Advito industry forecast is due. We last published an industry forecast under the Advito brand back in 2017. The next two reports were BCD Travel publications with the final report providing outlook for 2020.
Understandably, we didn’t present pricing forecasts for 2021 or 2022 and we’d not produce them for 2023 either. It simply makes no sense at the moment. To create a forecast you need a steady baseline and we still lack that in 2022. We’re still not in a position to produce a reliable forecast for the year ahead. While some organizations have produced forecasts for 2023, I see no reason to follow them.
Putting out numbers for the sake of it risks doing a disservice to our clients and could damage our own reputation along the way. Three words sum up why forecasting is riskier than ever right now: Uncertainty, volatility and variability. The pandemic has continued much longer than expected, and it’s still here, still impacting travel and the outlook in a number of key markets, particularly in Asia and especially in China.
Travel has yet to fully recover in a number of markets and where it has already recovered, the prospects for economic downturn could jeopardize further progress. Then add some geopolitics into the mix. The conflict in Ukraine has lasted much longer than anyone expected, and the implications have been significant, not least through sharply higher inflation and interest rates. And this could only be the start of geopolitical disruption.
Imagine if China invaded Taiwan or if there was regime change in Russia or Iran. The world is more volatile than we’ve become used to, and travel is particularly sensitive to this. But there is something I’ve been able to do. On request, I ‘ve been providing inflation forecasts for clients key markets. It’s a simple approach, but one which means travel managers at least have some credible numbers to use in their budgeting.
More importantly, I’d encourage them to follow the content coming out of Research and Intelligence. Equipped with the latest insights, they’ll be able to make informed decisions about their travel programs. To find out more, I’d recommend you read our Insights report on the outlook for travel costs, which you can download from the BCDTravel.com website.