Airfares and hotel rates are set to remain steady for the remainder of 2017, says Advito in the June update of its Industry Forecast for the year.
The consulting arm of BCD Travel said that despite a few regional fluctuations and 7% growth year on year in air traffic, average fares and rates will remain stable. It said, "Efforts by airlines to push up prices have so far had only limited success. But fares may soon start to slowly trend upwards."
The chart below shows the company's predictions for 2017. Right-facing arrows indicate outbound fares while left-pointing arrows are inbound fares. Red arrows are those forecasts which have changed since that at the beginning of the year.
Advito has raised its forecasts for economy fares from North America and Europe on the basis of increasing demand.
For hotels, Advito forecasts that average hotel rates will rise globally by 1 to 3%. Leading the rate charge will be New Zealand and South Africa. Rates in the Middle East are set to fall.
The company said, "As North American hotel demand may have passed its peak, we adjusted the range of our rate increase outlook for this region from 3-4% to 2-4%. We also revised our forecast range for South-west Pacific from 3-5% to 2-5%, after lowering our figures for Australia to 1-3%."
The question for many buyers will be where next? It is useful to look at growth indicators. The chart below shows the forecast for GDP growth form the IMF's World Economic Outlook.
The forecast for the year ahead looks like more of the same — steady growth. As a result, demand pressures will only increase, meaning 2018 might be starting to look tighter for travel budgets.