Utrecht : According to BCD Travel's 2020 Industry Forecast, global hotel rates will increase by 1 per cent to 3 per cent and airfares by 1 per cent to 2 per cent in 2020.
The rate increases will be higher in Asia - particularly Japan, host of the 2020 Summer Olympics, and Vietnam, where both leisure and business travel demand is strong.
Airlines are also expected to raise their average fares in most markets to help offset higher fuel and labor costs. Globally, average ticket prices are expected to rise between 1 per cent and 2 per cent in 2020.
The latest edition of BCD Travel's annual report on what's ahead for business travel also analyses individual regions. Among the findings:
- Hotel rates in North America will climb 2 per cent to 4 per cent in the US and Canada, and 0 per cent to 2 per cent in Mexico.
- Hotels will keep adding new properties in Asia, but demand will continue to outstrip supply. Rates will rise by 2 per cent to 4 per cent.
- Strong demand in Europe will push meetings costs up 3 per cent to 4 per cent.
- Meetings costs also will increase sharply in Sydney and Auckland, New Zealand.
- Regional airfares will rise by 3 per cent in Latin America as demand recovers.
- Airfares will rise 1 per cent to 2 per cent on regional routes in Africa, with higher increases on flights between the continent's fastest-growing economies.
- Uber's bid to buy Careem could create a dominant ride-hailing force in the Middle East.
"As we approach 2020, corporate travel buyers face the prospect of a slowdown in advanced economies, while the performance of emerging markets improves," said Mike Eggleton, Director of Research and Intelligence, BCD Travel.
"We believe this will restore the traditional growth gap that had recently narrowed between mature and emerging markets."
As an example, Eggleton cited BCD's assumption that the North American economy will expand by 1.6 per cent while Asian growth will be much stronger, possibly as high as 4.5 per cent.
Slower global economic expansion has resulted in weaker growth in demand for air travel year-on-year. Despite this, demand will be strong enough for airlines to raise fares in most markets to help offset higher fuel and labor costs. Air capacity expansion will limit fare increases, with some exceptions. In China and India, strong demand, competitive changes and regulatory developments will lead to higher fares.
Globally, average air ticket prices for intercontinental travel in both business and economy classes are expected to rise 1 per cent in 2020. Intercontinen-tal business class fares will be flat in Latin America and will fall 1 per cent in Southwest Pacific, where increased competition on transpacific routes will drive down prices.
In 2020, economy fares for regional flights are expected to rise by 1 per cent, while business class fares will increase by 2 per cent. Average ticket price increases will range 1 per cent to 3 per cent across the regions. The sharpest increase, at 3 per cent, will be for flights within Asia and Latin America as demand recovers. In Europe, regional economy fares should remain flat because of low-cost carrier competition.
Hotel demand will boost occupancy rates in 2020, resulting in average daily rates (ADRs) increasing by 1 per cent to 3 per cent. Asia will see hotel rate increases averaging 2 per cent to 4 per cent as demand outpaces supply. Latin America will have the lowest ADR increase at 0 per cent to 2 per cent, as demand in the region slowly recovers from a period of weakness.
The 2020 Industry Forecast provides travel and procurement managers with projected prices, insights and guidance to prepare for new sourcing strategies, supplier negotiations and budgeting. In addition to providing global supply, demand and pricing trends for the air, hotel, ground transportation and meetings categories, the Industry Forecast includes in-depth reports on Africa, Asia, Europe, Latin America, the Middle East, North America and Southwest Pacific. A global economic overview includes a focus on travel risk and security.