Air fares and hotel rates are set to jump sharply in Europe next year, according to new research.
The forecasts, which will make unpleasant reading for travel buyers, are contained in the 2018 Global Travel Forecast from Carlson Wagonlit Travel and the GBTA Foundation. "The uptick in global airfares comes as crude oil prices rise, in spite of airlines adding an expected 6% capacity in 2018. Complicating airline pricing is increased segmentation of basic fares among large carriers," say the organisations. They added, "[Hotel] suppliers are progressively moving corporate buyers away from fixed, negotiated hotel rates and toward dynamic rate pricing.".
The forecasts are shown in this week's chart.
Source: Carlson Wagonlit/GBTA Foundation
The research also showed that ground transportation costs are expected to remain flat in Europe in 2018.
"Industry experts predict record new car sales over the next five years, pushing up per unit fleet costs, while used car pricing is expected to fall 50%, hurting residual value for used rental cars and making current rental car pricing unsustainable," the organisations said.
Commenting on the findings, president and CEO, Carlson Wagonlit Travel, Kurt Ekert, said, "The higher pricing is a reflection of the stronger economy and growing demand. The global numbers from this forecast should be considered strong leading indicators of what 2018 will mean for global businesses, as we anticipate higher spending."
Jeanne Liu, GBTA Foundation vice president of research, added, "Geopolitical risks, uncertainties in emerging markets and ever-changing political environments in Europe and the United States mean today's travel professionals have more than ever to take into account when building their travel programmes. "The most successful programmes will have to keep a watchful eye on both geopolitical risks and a rapidly-changing supplier landscape as they re-evaluate strategy often and adapt as necessary."
UK travel buyers will be particularly hard hit in 2018. The research predicts that air fares from the UK will rise by 8.5% and that hotel rates will increase by 9.5%, as the effect of rising oil prices and the weak pound combine to hit British travel budgets hard.