Global hotel rates will increase around the world by between +1% and +3% in 2019 and air fares by between +1% and +2% in most markets, according to leading business travel management company BCD Travel’s newly released 2019 Industry Forecast. The increase in hotel rates is largely due to demand growth slightly outpacing supply in most markets. Air fares are expected to remain flat in Africa, decrease -2% in Latin America and increase by +1% or +2% in all other regions.
- Global hotel rates will increase around the world by between +1% and +3% in 2019 and air fares by between +1% and +2% in most markets, says BCD Travel’s newly released 2019 Industry Forecast.
- Intercontinental business fares will increase by +1% in Asia, Europe and North America, but they will be flat in all other regions, says the company;
- Most intercontinental economy fares will stay flat. BCD Travel expects them to increase only in Asia and Europe, while they will decrease for flights from Africa;
- Global hotel rates will increase by +1% to +3% in 2019, as demand growth remains just ahead of supply in most markets, according to the report.
The 2019 Industry Forecast provides travel and procurement managers with projected prices in preparation for supplier negotiations and budgeting. The forecast, published in prior years by Advito, the consulting arm of BCD Travel, includes supply, demand, and pricing trends for air, hotel, meetings, and ground transportation for all major regions of the world.
Globally, average ticket prices for regional and intercontinental travel in both business and economy class are expected to rise by +1% in 2019. Regionally, average ticket prices will vary between -2% and +3%, with the largest decreases seen in economy fares in Latin America and the largest increases in business class fares in the Southwest Pacific region. In Latin America, increased competition will be responsible for downward pricing pressure while in the Southwest Pacific, flat capacity and increasing demand will lift regional air fares.
Hotel rates are expected to increase by between +1% and +3% worldwide, with little variation by region. Much wider ranges can be seen on a country level, such as in India, where a +6% to +8% rate increase is forecast. Inversely, lower rates are most likely in African markets, particularly in Ethiopia and Morocco. In the US, hotel occupancy is generally higher year-over-year, especially in the major cities, thanks to the continued strength of the local economy, says BCD Travel. “Travellers may experience severe availability issues in some locations.” It warns.
In addition to its pricing forecasts and buying strategy recommendations for air, hotel, meetings and ground transportation for each major region of the world, BCD Travel’s 2019 Industry Forecast also includes discussions of travel risk and security, hotel chainwide agreements, alternative accommodations, global and regional macroeconomic trends, hotel mergers and meetings and hotel dynamic pricing.
BCD Travel expects mounting trade tensions and higher oil prices to cause global economic growth to slow in 2019. Advanced economies will be most affected, with Europe and North America losing some momentum, but it believes 2019 will be another good year for emerging markets with Latin America set for a much stronger performance, while growth is also expected to continue to improve in Africa and the Middle East, in its opinion.
On the matter of oil prices it expects these to be little different to the USD73 per barrel currently expected for 2018 as it notes OPEC has the spare capacity needed to “step in and stabilise the market” should growth in global oil demand be stronger than expected in 2019. Any delay in making up the supply shortfall could push up oil prices for a time, and BCD Travel has based its observations on an average oil price for 2019 of USD75.