CWT: Global airfare and hotel prices to rise in 2018
Published on : Wednesday, July 19, 2017
Global travel prices are expected to soar sharply next year, reaching almost 4% increases in certain sectors as revealed by the fourth annual 2018 Global Travel Forecast.
The survey has been produced in partnership with the GBTA Foundation that represents the research wing of the Global Business Travel Association. Overall, the global airfares would be raised by 3.55 in 2018. On the other hand, the hotel prices would be rising by 3.7% and ground transportation like buses, trains and taxis would be increasing by 0.6%.
Kurt Ekert, President and CEO, Carlson Wagonlit Travel (CWT) feels that the higher pricing is a consequence of the stronger economy and the rising demand.
Jeanne Liu who is the vice president of research, GBTA said that geopolitical risks, instability in emerging economies and the volatile political scenarios in the United States and Europe imply that modern travel professionals need to consider more things while creating their travel programs.
Liu said that the most successful programs would need to keep a strong vigil on the geopolitical risks and a rapidly-altering supplier landscape since they reevaluate strategies quite often and adapt as quickly as necessary.
The Scenario of Rise in Airfares
The rise in global airfares comes with the rise in crude oil prices, despite airlines adding about 6% capacity in the year 2018.
- Asia Pacific, for instance is estimated to witness a 2.8% rise in 2018 pricing with a strong domestic demand that is increasing in India and China.
- Throughout Europe, air travel is expected to keep growing while the prices rise by 7.1% across Eastern Europe and 5.5% in Western Europe. Limited competition and 2018 World Cup in Russia are likely to usher in significant price rises in this region.
- African and the countries in the Middle East expect a 3% rise in the midst of ongoing security threats and an oil industry that continues to be undergoing recovery.
- Across the Caribbean and Latin America, prices are expected to alter to a slight extent in 2018.
- South America would be observing a 20% increase in scheduled flights by the end of 2019.
- North America, on the other hand is likely to bear testimony to a 2.3% price rise.
- Canadian airlines would be competing quite aggressively thanks to the new market entrants and capacity growth of nearly 11% in 2017 and 12% in 2018.
Rise in Hotel Prices
There has been a global trend focusing on ‘smarter hotels’ that tend to highlight messaging, in-room entertainment and beacon technologies.
- Hotels prices are expected to rise by 3.5% in the Asia Pacific.
- Across EMEA, hotel prices would be rising by 6.6% in Eastern Europe, 6.3% in Western Europe, but just by 0.6% in the Middle East and Africa.
- In Latin America, hotel prices are expected to decrease by 1.2% and there would be steep declines especially in Brazil.
- The hotel demand in North America has leveled off since mid-summer 2016 but then the supply is estimated to continue growing steadily through 2018.
Trend in ground transport sector
In 2018, the price of ground transportation, like Ubers is expected to increase by 0.6% but within 2022, it is likely to rise by 5.5%.
Tags: 2018 Global Travel Forecast, Carlson Wagonlit Travel, GBTA Foundation, Global Business Travel Association, Kurt Ekert