First joint GBTA and CWT forecast shows moderate price increases expected worldwide.
ALEXANDRIA, VA – The GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), released a new joint 2015 Global Travel Price Outlook report with Carlson Wagonlit Travel (CWT). The report gives an early indication of what businesses can expect in 2015, helping them plan ahead during the upcoming budgeting period.
The report highlights that demand from emerging markets such as China, India and Brazil and improved economic growth in advanced economies, combined with limited advances in travel supply, will result in an upward pressure on rates, particularly in high-demand travel markets. The study shows that travel managers are prepared for this, however, with those surveyed by GBTA are expecting airfares to increase among all categories due to consolidation in major markets.
“The study reveals that travel managers expect price increases next year across the board on travel categories including airfares, hotel room rates and rental car rates,” said Joseph Bates, GBTA Foundation vice president of research. “Risks to the forecast including the escalating Ukranian crisis; declining European inflation; burgeoning debt in China and oil price shocks could potentially have a negative influence on travel demand and pricing however, so travel managers are advised to consider contingencies for these risks in their planning.”
“With business travel prices on the rise, this study is the key to effective budgeting,” said Christophe Renard, vice president, CWT Solutions Group. “Working with the GBTA Foundation has allowed us to share best practice, industry knowledge and expertise to create a wide-ranging look at the year ahead.”
The 2015 Global Travel Price Outlook is split by category: Air; hotel; ground; and meetings & events, making for easy comparison across regions.
Air
With rising demand, favorable cost structures and slowly expanding capacity, airfares are expected to rise gradually through 2015, by as much as 2.2 percent, although low-cost carriers are limiting price increases in some regions.
Latin America will see the highest price increases of any region advancing 3.5 percent, while price growth in Europe will be much more modest. Expect the growth in traffic among low-cost carriers to lead to diminished pricing power of many legacy carriers in Asia Pacific and North American air prices to be driven by airline consolidation and falling capacity.
Hotel
Hotel suppliers will be in a better negotiating position than they have been for some time in 2015, due in part to stronger demand and investor interest, and favorable capital costs. This improved outlook could lead to greater pressure on negotiated rates for travel managers and buyers, and globally, prices are expected to rise by as much as 2.6 percent.
Price growth will be led by Latin America, where we expect a 6.3 percent increase in managed rates. Hotel prices in North American and Asia Pacific will see moderate growth, while hotel rates throughout EMEA will grow slower than the global average throughout 2015.
Ground
In contrast to the air and hotel sectors, the ground transportation industry has an abundance of supply. With industry consolidation and strong competition, global prices are expected to remain flat throughout 2015.
The trend will be similar across all regions, except Latin America, with moderate price growth of 2 percent expected in 2015 based on generally high travel demand throughout the region.
Meetings & Events
Compliance will remain a concern for the meetings & events sector next year, regardless of industry or geography. While there are some exceptions by country, there are several trends expected across the industry in 2015, including a rise in the use of social technology.
It is expected that there will be more domestic meetings and shorter booking lead times across the globe in 2015. Mid-price hotels offering core meetings & events services will be most popular.
The full report is available to GBTA members by clicking here and non-members may access the report here.
Further insight into 2015 travel prices
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
