ALEXANDRIA, Va. and AMSTERDAM, July 21, 2015 /PRNewswire-USNewswire/ -- New research identifies six hot spots – India, China, Colombia, Mexico, Singapore and Australia — where increased business travel demand is driving significant air price increases. This is despite global air travel prices displaying signs that they will be essentially flat in 2016.
"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."
These findings come from the 2016 Global Travel Price Outlook, research from the GBTA Foundation, the education and research arm of the Global Business Travel Association (GBTA), and leading travel management company Carlson Wagonlit Travel (CWT).
The report provides global, regional and country-by-country projections for air travel, hotel, ground transportation and meetings & events prices in 2016.
"The data provides a compelling picture of a dynamic business travel industry," said Christophe Renard, vice president, CWT Solutions Group. "For cost-conscious travel managers, this outlook can help drive opportunities and cut costs to stretch every travel budget further."
Airline prices are set to be nearly flat on a global basis due to significantly lower energy prices, steady increases in capacity and stable demand. Regionally, the report projects:
- Asia Pacific and Latin America - small price increases (1.2 percent and 0.8 percent respectively). See below for six hot spots in these regions.
- In Europe, Middle East and Africa, prices will see a small increase (0.4 percent).
- In North America, (0.5 percent) — with the U.S. slightly up (0.5 percent) and Canada sharply down (-5 percent).
Yet, global and regional numbers reveal only part of the picture. There are six countries that are seeing projected price increases as a result of higher demand, including:
- Colombia - by 3 percent, caused by a rapidly growing middle class and relatively stable economy, which are driving demand while capacity has grown at a modest rate.
- Mexico - by 3 percent, driven by strong domestic and international demand.
- Singapore - by 3 percent, driven by lower energy prices and less restrictive monetary policy that will fuel demand.
- India - by 2.6 percent, driven by spiking business and consumer confidence.
- China – by 2.8 percent, bolstered by domestic demand and strong demand despite slowing economic growth and business travel volume.
- Australia - by 2.7 percent, as improving business conditions will boost domestic air travel.
A seventh nation – Venezuela – is projected to see a 6.3 percent increase, caused by high inflation, the drop in oil prices and a currency fixed to the US dollar.
Globally, 2016 will show an increase 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 percent — due to high inflation in some nations, particularly Venezuela and Brazil.
- In North America, high demand will increase rates by 4.3 percent, driven by economic activity in the Bay Area, Los Angeles and other major U.S. cities.
Car rental pricing has been under pressure for a number of years. Demand isn't rising sharply enough, and fleets are not being managed tightly enough, leading to stagnant rates globally and regionally. The most interesting trend we're seeing globally revolves around the sharing economy. While we do not predict a significant impact on traditional car rentals globally, there may be an impact to rental car companies' car share and sedan/black car segments.
Meetings & Events
Across the globe, 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 percent increase in cost and an 11 percent 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 percent cost per attendee per day increase, with food and beverage pressures continuing to be a significant driver of costs.
Notes to editors
The report will be discussed at GBTA Convention 2015.
A Glimpse into 2016: Forecasting Supplier Prices
Tue. July 28| 10:00 am - 11:00 am | 314AB
The forecast methodology can be found in Appendix 1 (page 19) of the 2016 Global Travel Price Outlook.
About the GBTA Foundation
The GBTA Foundation is the education and research foundation of the Global Business Travel Association (GBTA), the world's premier business travel and meetings trade organization headquartered in the Washington, D.C. area with operations on six continents. Collectively, GBTA's 7,000-plus members manage more than $345 billion of global business travel and meetings expenditures annually. GBTA provides its growing network of more than 28,000 travel professionals and 125,000 active contacts with world-class education, events, research, advocacy and media. For more information, see gbta.org and gbta.org/foundation.
About Carlson Wagonlit Travel
Carlson Wagonlit Travel (CWT) is a global leader specialized in managing business travel and meetings and events. CWT serves companies, government institutions and non-governmental organizations of all sizes in more than 150 countries and territories. For more information about CWT, please visit our global website at www.carlsonwagonlit.com. Follow us on Twitter @CarlsonWagonlit.
SOURCE Global Business Travel Association (GBTA)