A new 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. In fact, it suggests that air prices in Canada are set to increase as much as 1.5 per cent.
The 2015 Global Travel Price Outlook report, a joint publication by Carlson Wagonlit Travel (CWT) and the Global Business Travel Association Foundation, gives an early indication of what businesses can expect in 2015, helping them plan ahead during the upcoming budgeting period.
It 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 expecting airfares to increase most among all categories due to consolidation in major markets.
The 2015 Global Travel Price Outlook is split by category: air; hotel; ground; and meetings & events, with highlights as follows:
With rising demand, favourable cost structures and slowly expanding capacity, airfares are expected to rise gradually through 2015, by as much as 2.2 per cent, 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 per cent, 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 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 favourable 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 per cent.
Price growth will be led by Latin America, with an expected 6.3 per cent increase in managed rates. Hotel prices in North America and Asia Pacific will see moderate growth, while hotel rates throughout EMEA will grow more slowly than the global average throughout 2015.
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, where moderate price growth of two percent is 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.
To view the report in full, click here. CWT will be releasing 2015 price forecasts for the meetings & events and energy, resources & marine industries later this year.