Travel cost increases for 2017?

A report released today by a study by the GBTA Foundation and Carlson Wagonlit travel has forecast some travel cost increases for 2017, but only marginally.

The report, The Global Sector Price Forecast of Travel 2017, has identified the key risks for the global market.  The study was carried out by the GBTA Foundation, the training and research arm of the Global Business Travel Association (GBTA), and leading travel management enterprise – Carlson Wagonlit Travel (CWT). This third annual report provides global, regional and country air prices, hotels, ground transportation, plus meetings and events in 2017 projections.

Travel prices will increase marginally or will remain flat in 2017, while geopolitical and economic uncertainty will mean that travel managers have to maintain flexibility to keep ahead.

The new report today  highlighted six key risks facing 2017 that could have an impact on both prices travel industry as a whole global economy. They are the performance of emerging markets, financial market turmoil, geopolitical risks, uncertainty surrounding the Brexit, the potential fluctuation of interest rates in the US and oil prices.

“While business travel has repeatedly shown its resilience, the high level of global uncertainty we will face in 2017 will force those responsible for these trips to be more agile and flexible when drawing up their travel programs travel,” said Jeanne Liu, vice president of GBTA Foundation Studies. “The forecast shows only marginal increases or prices of flat trips but in 2017 the key to building successful travel programs will closely monitor the shifting global landscape and know how to react.”

Kurt Ekert, president and chief executive officer of CWT, said, “We are witnessing relatively low, inconsistent and in some cases fragile economic growth. Travelers and travel managers need to understand their travel patterns and spending while remaining alert to the impact of economic uncertainty and volatility. Proper planning will need to be in place in order to make changes whenever necessary, and to avoid the disadvantages of financial risks “.

Air

Prices are expected to increase in  global air travel only slightly (2.5%) in 2017, while rates could fall below 2015 levels in some markets because oil prices remain low. Charges for supplementary services will have an increasing impact: these services happen to constitute 7.8% of the global airline revenues in 2015 from 6.7% in 2014 and it is expected that this trend will continue.

Asia Pacific: although the region is expected to experience a decline in prices of 1.1%, it is expected to remain largely stable in 2017 thanks to low oil prices. However, it is likely that Japan and Singapore will experience a significant impact on prices of air due to the projections of the exchange rates of their currencies.

Europe, Middle East and Africa: varied situations are expected. It is anticipated that in Eastern Europe prices will increase by 4% due in part to limited competition. Prices are expected to increase in Western Europe by 0.5%, and in Africa and the Middle East by 2%.

Latin America and the Caribbean is expected to drfop in price by 1.9 per cent.

North America: prices are expected to increase by 3.7%. It is anticipated that airlines reinvest part of the profits caused by lower oil prices in the purchase of new aircraft and improving their product.

Hotels

The hotel mega-mergers are hogging covers but its impact on prices is not likely to be felt until 2018. Hotel services such as room service, laundry and security remain important for corporate travelers. Therefore, traditional hotels remain an attractive alternative for business travelers despite the options offered by the collaborative economy.

Asia Pacific is expected that prices will fall slightly; 0.6%.

Europe, Middle East and Africa: again there are differences depending on the areas because the geopolitical incidents have an impact on hotel rates. In addition, low gas prices and crude oil prices have made corporate travel possible decline in the sector, mainly in the Middle East, Africa and Russia. It is anticipated that prices will fall in Eastern Europe by 2.4%. In Western Europe, prices will rise by 1.8% and in the Middle East and Africa rates will decrease slightly; 0.5%.

Latin America and the Caribbean is expected that prices will fall by 0.9%.

North America: in total, it is expected that prices of hotels will increase by 4% in 2017 but the difference between both coasts will be noticeable. The West Coast cities like Seattle, Los Angeles, San Jose and Vancouver will see substantial increases in one or two digits due to the high-tech boom and the shortage of hotel rooms. Meanwhile, East Coast cities like New York and Toronto, as well as the oil and gas company Canadian region, will face low growth or even a decline due to oversupply of hotel rooms.

Ground-based transportation

A climate of intense competition dictate that prices of land transportation will remain fairly stable globally.

Asia Pacific is expected to increase prices slightly; 0.8%.

Europe, Middle East and Africa: it is estimated that, in general, prices will remain flat with a very slight drop of 0.1% expected in Western Europe.

Latin America: prices will go up by 0.5%.

North America: prices are expected to remain flat in 2017.

Meetings and Events

Moderate increases are expected to occur in the daily cost per attendee in Asia Pacific and North America. Prices are expected to remain flat in Europe and down 10% in Latin America. The group size will grow marginally around 3-6% in Asia Pacific, Europe and North America while in Latin America will remain flat.

The full report is available by clicking here.

Elle Draper

Elle, along with Alan, is the owner of Spain Buddy and the busy web design business – Spain Web Design by Gandy-Draper.
Born a “Norverner”, she then spent most of her life “Dann Saff” before moving to Spain in 2006. Elle’s loves are Alan, the internet, dogs, good food, and dry white wine – although not necessarily in that order.