After posting sharp rises in 2019, global travel pricing is likely to slow down in 2020, according to the annual Global Travel Forecast.
The sixth annual report, compiled by CWT and the GBTA, predicts worldwide flight prices will rise 1.2 per cent next year, hotels 1.3 per cent and rental car rates 1 per cent.
Experts say that while the global economy is expected to grow 3.6 per cent in 2020, a “raft of uncertainties” could put a damper on travel pricing.
CWT CEO Kurt Ekert commented: “The risks and ambiguity have increased over the past few months – not least the threat of escalating trade wars, the impact of Brexit, possible oil supply shocks and the growing likelihood of recession. This forecast will help travel buyers make the right decisions in an increasingly challenging environment.”
GBTA COO and executive director Scott Solombrino added: “Technological advancements and an increasingly volatile economic and political landscape across the globe have changed the way today’s travel buyers need to do their jobs. This annual forecast provides insights into the key drivers forcing these shifting priorities and gives a road map for travel buyers looking to plan their 2020 travel programmes.”
Looking at the regional forecast, the collapse of India’s Jet Airways in April created a gap in the market for some key routes, and the reduced competition has meant higher air fares in Asia Pacific. However, with some airlines adding capacity to fill the void, fares have begun to normalise and will rise 1.3 per cent next year, according to the report. Meanwhile, Asia’s booming hospitality industry and Japan’s hosting of the Rugby World Cup will drive rates up an average of 1.3 per cent, and the growing ride-sharing market will only create a 0.5 per cent rise in ground transportation prices.
In Europe, labour unrest, climate change protests, global trade wars, rising oil prices and regional terrorism all have the potential to cause a slow-down in travel pricing, with the forecast predicting a small rise on 0.5 per cent in air fares in Western Europe and a 0.2 per cent decrease in the east. Hotel rates in both regions could go up 0.7 per cent, though ground transportation prices in Western Europe will only see a 0.5 per cent rise compared to 1.5 in Eastern Europe.
Latin America’s volatile political and economic situation in some of the largest economies such as Argentina, Mexico and Brazil will hurt prices. Air is expected to see a 1.6 per cent dip and hotel rates will drop 0.4 per cent. Growing demand for rental cars will drive ground transportation prices up 1 per cent.
And the thriving economies of the US and Canada combined with increasing uncertainty due to tariffs and trade wars will see growth in GDP slow. As a result of these factors and airlines’ growing use of ancillary fees will see air fares increase 2.3 per cent in 2020, while slowing demand for hotels in major cities will drive a modest 2.3 per cent increase in rates. Ground transportation prices are only predicted to rise 1 per cent across the region.
Projections of the report are based on transaction data from CWT’s global client portfolio, including anonymised travel patterns, over the past ten years. It also takes into account key macroeconomic and per-country indicators.
Download the full 2020 Global Travel Forecast here