A new study has identified six ‘hotspots’ globally where increased business travel demand is driving significant increases in air ticket prices.
The 2016 Global Travel Price Outlook shows that in India, China, Colombia, Mexico, Singapore and Australia prices are rising sharply despite global air prices remaining flat next year.
The findings come from the GBTA Foundation, the education and research arm of the GBTA and travel management firm CWT.
“Business travel is a leading indicator of global economic activity,” said Joseph Bates, GBTA Foundation vice president of research.
“The top-line pricing outlook for air, hotel and ground in 2016 is surprisingly stable. But when you dig deeper, the data reveal global hot spots where demand is driving air travel price increases. For 2016, India, China, Colombia, Mexico, Singapore and Australia are projected to top the list,” he said.
Apart from the six countries projected airline prices for 2016 are flat due to significantly lower energy prices.
Hotel
The study showed next year there will be an increase globally in hotel prices because demand is overtaking supply in every major global region:
- Asia Pacific will see hotel prices rise by 3 percent — led by Singapore, Japan and Australia.
- In Europe, Middle East and Africa, hotel prices will see a moderate increase at 1.8 percent, although many European countries will experience price increases in local currency due to exchange rates with the U.S. dollar. Prices in Russia will rise significantly due to the impacts of the drop in oil prices and sanctions on its economy.
- In Latin America, prices will rise 3.7 per cent due to high inflation in some nations, particularly Venezuela and Brazil.
- In North America, high demand will increase rates by 4.3 per cent, driven by economic activity in the Bay Area, Los Angeles and other major U.S. cities.
Ground transportation
The study found that due to a lack of demand in car rental and fleets not managed tightly enough rates remain stagnant globally. It also found the sharing economy will have an impact on traditional car rentals around the world.
Meetings and events
Globally, only modest increases are expected in cost per attendee per day and group size, with the exception of Asia Pacific which will see a 5 per cent increase in cost and an 11 per cent increase in group size.
Strong demand from China and India is the major driver for the region’s increasing cost and group sizes.
North America will also see a 4.5 per cent cost per attendee per day increase, with food and beverage pressures continuing to be a significant driver of costs.