The 2018 Industry Forecast has been released by consultancy group, Advito and corporate travel management company, BCD Travel. The report is designed to assist procurement leaders plan their approach to managing travel and meetings spend for the next year by delivering in-depth analysis of key impactors to the industry. The report forecasts using actual air segments, room nights and car rental bookings from BCD Travel to reflect potential shifts in travel patterns and booking behaviour.
Airfares: Improving economic conditions and lower airfares in some markets are supporting strong global air travel demand. Traffic grew at 8% year-over-year during the first half of 2017.1 Cautious capacity expansion means airlines can continue to grow revenues without the need for higher fares. But prices may start to trend slowly upwards in markets where demand is strongest.
Hotel Rates: Global hotel rates will increase by 2% to 4% in 2018, as demand continues to outpace supply in many markets. A healthy pipeline of new supply will help moderate the extent of these increases in some emerging markets. And there are signs that the pricing power enjoyed for several years by hotels in North America and Europe may soon pass its peak.
What NDC means for travel buyers?
Airlines are encouraging travel management companies (TMCs) and their mutual corporate clients to move to new booking channels, using IATA’s New Distribution Capability (NDC) standards. But no single solution exists so far that would address travel buyers’ concerns around costs, complexity and support.
Machine learning uncovers savings opportunities
While suppliers were early adopters of machine learning to make more relevant offers to travellers, new applications of these techniques are giving some control back to travellers and helping them make smarter travel decisions. Machine learning can help spot entirely new opportunities to make savings and take some of the stress out of travel.
Hotel rate availability
Hotels are becoming more sophisticated in their use of yield management techniques. This has resulted in business travellers being increasingly unable to find and book rooms at their preferred rate.
A surge in supply in 2018, as OPEC production cuts end and U.S. producers ramp up their output, will offset the positive effects on oil prices of any rise in demand. The production intentions of Iran, Libya, Nigeria and Russia remain unclear. Given these uncertain circumstances, we see little reason for oil prices to move much higher than US$50 in 2018.
Read the full report:
To download your copy of the Advito and BCD 2018 Industry Forecast visit the following link, https://www.advito.com/2018-industry-forecast-for-corporate-travel/