Pricing power weakens amid softening business demand and economic uncertainty
Even some of the most advanced algorithms will have trouble looking deep into the future to make accurate predictions. To combat this uncertainty when analyzing trends across all travel categories, we’ve decided to produce a quarterly travel price index report for air, hotel, rail, and rental car prices.
Market snapshot: North America
North America is being heavily impacted by recent trade policy changes that are further fueling the geopolitical turmoil, driving down travel demand. Year-over-year (YOY) we are seeing a significant drop in intercontinental airfares to almost all regions, especially in economy. The Southwest Pacific region is the only area where we are seeing an increase in fares out of North America, across both economy and business cabin. Meanwhile, domestic fares remain stable as delays in new aircraft deliveries are limiting seat capacity, despite weaker corporate travel demand.
While many secondary and smaller markets in the US and Canada are seeing moderate declines in best available rates (BAR), major markets are showing strong YOY and quarter-over-quarter (QOQ) increases. On the East Coast, some of this growth is likely driven by the FIFA World Cup.
Rail tickets and rental car rates in North America are slightly higher compared to last year. For the first time this year, rail prices on the New York-Boston route are increasing with a 5% fare hike. Even as commercial demand weakens, car rental rates remain high as suppliers focus on reducing costs, improving utilization, and expanding leisure segments.
One of the most challenging parts of being a travel manager today is understanding how the constant change in the industry affects your program. Our air and hotel experts have used the travel price index to come up with some key focus areas for travel managers to address.
Air program focus areas
As the up cycle in airfares comes to an end, there may be new opportunities to drive better savings. For example, driving compliance to reduce off-channel bookings can help you maximize spend with preferred suppliers—ultimately giving you greater leverage at the negotiating table. Or if your preferred airlines aren’t delivering clear value, showing your ability to shift share can prompt better offers and added benefits. Keep in mind that additional carrier-imposed charges are now accounting for close to 20% of the total ticket price, so assessing the beyond-discount contract value is critical to your program. Consider factors like traveler wellbeing and sustainability to determine what’s optimal for your program.
Hotel program focus areas
As we enter RFP season, it’s important to have a data-driven rate strategy in place. Start by looking at prior-year performance, market benchmarks, and anticipated volume shifts to set clear, informed target rates. This will put you in a stronger position to challenge supplier pricing as rate hikes become increasingly more aggressive. However, while sourcing for 2026, don’t forget about your current program. With six months still left in the year, there’s ample time to fine-tune performance and drive added value. Look at key metrics including rate availability, usage and savings performance to ensure your negotiated rates are still aligned with market trends. Not only will this help you maximize value today, but it can also strengthen your position heading into the 2026 RFP.
What is an index?
As a quick reminder, it’s important to note that this report is not a forecast. A forecast uses published rates and fares, along with other socioeconomic data and world events to predict how rates and fares will change. This is an index. An index quantifies how published rates and fares are changing and avoids making predictions for long-term trends.
The Advito travel price index looks at actual, historical pricing data and compares it with future shopping data for the remainder of the quarter to analyze variance versus the previous period and the trend versus the previous quarter. We are shopping millions of public price points, and our shopping technology behaves like a business traveler. Our first index was released in Q4 2022, and after a positive response from clients looking to understand pricing trends in the short- to medium-term, we have produced similar reports for each quarter.
The full report features global trends, a breakdown of each region, as well as travel sector types. In the air analysis, we look at both business and economy class fares, as well as intercontinental and regional travel. In the hotel report, we’re analyzing the variance in average daily rates between Q3 2024 and Q3 2025, as well as the quarter-over-quarter trend. The result is a reliable report based on published airfares and hotel rates that does not make long-term predictions.
Interested in the full Advito Travel Price Index Report? Reach out to your consultant today. Not an Advito client? Access your copy of the full report with a breakdown of each region here!