No matter how much rigor goes into generating a forecast, total accuracy is impossible given the many unforeseen dynamics that evolve over time.
Listed below are the most prominent risks that could impact travel prices in 2015, each having a potential downside influence in travel demand and pricing, taken from a recent report from GBTA and Carlson Wagonlit Travel.
Escalating Ukrainian crisis
- Could affect European and Russian economies
- Potential knock-on risks from short-term spikes in energy prices
Declining European inflation could devolve into deflation
- Falling prices could lead to expectation of future price declines
- Consumers and businesses could delay spending
Growing local government and corporate debt could result in a hard landing for China
- Insolvency forces central authorities to step in and bail out local governments
- Critical infrastructure building would slow
Oil shocks always a threat
- Concerns over potential supply disruptions could result in oil price instability
- Downside risks include supply crises resulting from geopolitical events or natural disasters
- Price spikes are akin to adding another tax on consumer and business spending, translating into higher travel prices almost immediately
Click here to read a more in-depth look into the GBTA and CWT Global travel price outlook