Airfares, hotel prices, and ground transportation anticipate up to almost four percent increase in rates next year due to rising inflation, higher oil prices and emerging markets, according to the latest 2018 Global Travel Forecast.
Global travel management company Carlson Wagonlit Travel together with the education and research arm of Global Business Travel Association, GBTA Foundation, has released the fourth annual 2018 Global Travel Forecast that foresees global airfares to rise 3.5 percent in 2018; hotel prices to be 3.7 percent higher; and ground transportation such as taxis, trains and buses to rise only 0.6 percent - significantly less than the three percent inflation forecast for 2018.
“The higher pricing is a reflection of the stronger economy and growing demand,” said Kurt Ekert, president and CEO, Carlson Wagonlit Travel. “The global numbers from this forecast should be considered strong leading indicators of what 2018 will mean for global businesses, as we anticipate higher spending.”
“Geopolitical risks, uncertainties in emerging markets and ever-changing political environments in Europe and the United States mean today’s travel professionals have more than ever to take into account when building their travel programs,” said Jeanne Liu, GBTA Foundation vice president of research. “The most successful programs will have to keep a watchful eye on both geopolitical risks and a rapidly-changing supplier landscape as they re-evaluate strategy often and adapt as necessary.”
The uptick in global airfares comes as crude oil prices rise, in spite of airlines adding an expected 6.0 percent capacity in 2018. Complicating airline pricing is increased segmentation of basic fares among large carriers. Travellers now have the option of choosing a basic economy, restricted fare versus various upgraded fares, with specific service options and pricing vary by airline.
Asia Pacific expects to see a 2.8 percent rise in 2018 pricing with domestic demand increasing, particularly in China and India. However, as many of the economies in Asia strengthen, weaknesses in infrastructure – and airports in particular – are increasingly becoming apparent.
Globally, the 3.7 percent average increase in hotel prices masks what is actually happening on a regional level. Europe is expected to post strong increases, while other regions are barely keeping up with inflation. Additionally, prices are expected to fall in Latin America and the Caribbean. We expect the impact of the 2017 mergers will be felt during the 2018 RFP season.
Suppliers are progressively moving corporate buyers away from fixed, negotiated hotel rates and toward dynamic rate pricing. There is also a global trend towards “smarter” hotels, with hotels investing in beacon technologies, messaging, in-room entertainment and more. Increasingly tech-savvy guests will use apps to check in and out, unlock their hotel room door, operate the television remotely and control room temperature.
Across Asia Pacific, hotel prices are likely to rise 3.5 percent - with a large discrepancy as Japanese prices are expected to fall 4.1 percent, but New Zealand is set to rise a full 9.8 percent. Strong economies mean demand is increasing in the APAC region. Buyers should anticipate a more challenging discussion with newly merged hotel groups, especially in high-volume markets such as Bangkok, Beijing, Shanghai and Singapore.
Ground transportation pricing is expected to rise only 0.6 percent in 2018 (but 5.5 percent by 2022). Industry experts predict record new car sales over the next five years, pushing up per unit fleet costs, while used car pricing is expected to fall 50 percent, hurting residual value for used rental cars and making current rental car pricing unsustainable. Market-specific regulations for curbing emissions and rising oil prices have suppliers’ already increasing availability of “green” rental cars.
Sharing economy players such as Uber and Lyft are expected to continue double-digit growth upwards of 10.0 percent in 2018, before settling down into single-digit growth for 2019. Their growth is under threat by costly regulation and government bans.
Continued uncertainty in mining and a cautious recovery in the oil and gas industry will result in flat rates for 2018 in Asia Pacific. Business continues to grow in China as most major car rental and sharing economy suppliers have a presence. Sharing economy suppliers Didi Chuxing in China, Ola in India and Grab in Southeast Asia have all achieved economies of scale that make them key competitors to more traditional car rentals firms and taxis.
Find out projected travel prices in other regions here.
Carlson Wagonlit Travel’s white paper on The Virtues of Virtual Payment analyses the shifting requirements of digitalised travel as business and government travellers increasingly turn to virtual payment.(read more)
The Flight Centre Travel Group is unifying its corporate travel operations in its newly formed Asia region.(read more)
The role of a travel manager is evolving. Not only is the travel industry becoming more complex, the rise of digital tools in the past decade has completely revolutionised the way business travellers book and travel. (read more)
Singapore – Nu Skin Japan brought 250 of its regional sales leaders for a well-deserved travel incentive to Singapore(read more)
Direct from IMEX America 2016 in Las Vegas –Timo Kiuru, CEO of The Unthinkable, started the knowledge session with a statement, “Welcome to the death of event experiential marketing.” Kiuru, recognised by Connect Corporate Magazine as...(read more)
Singapore – A new Helsinki-based “hotel without bedrooms” event venue concept has made its way into Singapore. Here’s a sneak peek inside Huone Events Hotel before its February 23 opening and why it is bound to disrupt the local meetings industry.(read more)
You might be doing it wrongly if you have been offering product details that fail to go beyond venue spaces and capabilities. (read more)
Singapore – Set to open in the second quarter of 2017, the 222-room Sofitel Singapore City Centre has announced the appointment of Freddy See as Director of Sales & Marketing. (read more)
Singapore – October is set to be the busiest business events month as Marina Bay Sands welcomes the highest number of major events in a single month since its opening in 2010.(read more)
What do Malaysia and Singapore have in common in the way they market themselves and stay ahead as business event destinations? (read more)
Singapore – HotelAsia, one of Food&HotelAsia’s pioneer specialised trade shows will feature an impressive host of brands, showcase new equipment and technology and unveil a Singapore Pavilion for the first time. (read more)
Join our mailing list
Share your thoughts