Geopolitics priced in: double-digit airfare surges take off, while hotel feels pressure and ground pricing hold steady
This quarter, we’ve refreshed our quarterly travel price index report format to deliver deeper insight from our air and hotel experts. The updated approach places greater emphasis on year‑over‑year trends and a more focused set of air route data, helping provide a clearer, more reliable view of pricing dynamics in today’s volatile market.
Market snapshot: North America
As we enter Q2, domestic and regional airfares across North America are now seeing double-digit increases partially driven by transborder capacity changes and softer Canadian demand. Beyond fare increases, U.S.-based airlines are increasingly relying on ancillary charges to offset elevated operating costs, with several major carriers announcing higher checked baggage fees. On international routes, pricing pressure is most pronounced in premium cabins. Business class fares to Europe continue to rise, with flights to London from major hubs like New York and Boston remaining among the highest-yield long-haul markets globally.
While geopolitical developments aren’t directly pushing hotel rates higher, energy costs and broader travel dynamics are beginning to influence demand patterns. Europe and North America continue to carry the highest hotel costs overall, supported by constrained supply and steady demand. Within North America, however, hotel pricing remains highly localized. In the U.S., gateway and event‑driven markets such as New York and Miami are holding firm, while broader national averages have begun to ease. In Canada, more stable domestic demand and average daily rate (ADR)‑led resilience in cities like Toronto and Vancouver are supporting low but steady growth.
Rail pricing is also becoming increasingly route‑specific. Competitive dynamics and localized cost pressures can shift value quickly on high‑volume corridors, reinforcing the the importance of route-level visibility. In the U.S., strong demand is driving price increases on high‑traffic routes such as New York–Boston.
Meanwhile, car rental pricing remains relatively stable overall. That said, SUV rentals are seeing above‑average increases as demand for larger vehicles remains strong, particularly in North America. This paired with slower fleet renewal has sustained pricing pressure within the SUV segment.
One of the biggest challenges for travel managers today is understanding how constant change in the market affects their program day to day. Using insights from the Travel Price Index, our air and hotel experts have outlined a few key focus areas travel teams should prioritize in Q2.
Air program focus areas
Entering Q2, air pricing is being driven significantly by a surge in jet fuel prices and growing concern around fuel shortages resulting in higher overall costs and evolving seat capacity changes. Fuel surcharges and ancillary fees have become the primary pricing lever as carriers respond to elevated fuel prices and geopolitical volatility. For your travel program to be successful in the current environment, the priority must be on gaining visibility visibility into total ticket price composition, validating how discounts apply when fare construction evolves, while taking a more agile approach to policy and supplier strategy, balancing cost control with duty of care as networks and routings continue to shift.
Hotel program focus areas
Geopolitical volatility is making booking behavior more important than ever. While rate growth remains relatively moderate, off‑channel bookings can quickly erode both duty of care visibility and negotiation leverage. As a result, travel teams should focus on reinforcing managed channel compliance, understanding total managed demand, and using that insight to strengthen supplier conversations. In periods of uncertainty, visibility into where travelers stay and how they book becomes essential to balancing cost control, traveler support, and long‑term program value.
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 year-over-year variance. 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 Q2 2026 and Q2 2025. 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!