Hotel rates are showing signs of stabilising while airfares are expected to “stay strong”, according to the latest research from FCM Consulting.
The TMC’s consulting arm found that there was a “minor slowdown” in airline seat growth in late 2022, with overall capacity for the year ending up 17 per cent down compared with 2019’s figures.
International business class fares in 2022 were up by an average of 15 per cent compared with pre-Covid prices, with economy fares around 12 per cent higher over the same time scale. In Europe, these average fare increases were slightly lower – at 10 per cent for international business class and a rise of 11 per cent for economy tickets.
“Predicting full-year 2023 seat capacity is a very long-range forecast, nonetheless, airline schedules are offering just four per cent fewer seats than in 2019,” said FCM Consulting’s general manager Felicity Burke.
“Since our last report in October 2022, the top 20 global corporate airlines have revised their forward schedules down by 3 per cent.”
The report found that average hotel room rates in Europe last year remained around 5 per cent lower than in 2019 with occupancy level of 89 per cent.
FCM said growth in Europe has “remained restricted”, with average room rates falling by 14 per cent between the third and fourth quarter of 2022. This included 7 per cent falls in London, Dublin and Madrid, as well as drops of 18 per cent in Berlin, 9 per cent in Frankfurt,
Andy Hegley, FCM’s UK managing director, welcomed “further stability” in hotel rates and the growth in airline capacity.
“In London, this was reflected in a 7 per cent decrease in average rate paid in comparison to the third quarter of 2022,” he added. “This is very encouraging for business travellers and helping to drive recovery in this market.
“Combined with the ramp-up of international capacity, we should also start to see airfares closing in on pre-pandemic rates in the first quarter of 2023.”