Airfare pressure builds while hotel trends diverge amid ongoing cost volatility
In today’s volatile market, even the most advanced algorithms will have trouble looking deep into the future to make accurate predictions. To combat this uncertainty, our quarterly travel price index report analyzes year-over-year shifts across air, hotel, rail, and car to provide you with a clear view of how prices are evolving in the short-term.
Market snapshot: Europe
Heading into Q3, airfares across Europe remain elevated year-over-year. Government-imposed costs, including SAF requirements, are adding pressure alongside high fuel prices and ongoing supply constraints. At the same time, carriers are redirecting capacity toward more profitable markets, as the focus shifts from growth to yield optimization, sustaining upward pressure on fares.
Hotel pricing tells a more uneven story. Europe remains one of the main drivers of rate growth this quarter, but the gap between markets is growing. Northern and Western Europe are seeing some of the strongest increases, with select markets approaching double-digit growth due to sustained demand and limited availability. In contrast, parts of Southern Europe, such as Croatia and Turkey, are trending downward. As a result, broad regional strategies are becoming less effective, making more targeted sourcing approaches essential.
Throughout Europe, rail fares are generally rising, although competition is stabilizing select routes, particularly in Spain and Italy. While many public fare announcements have stated stable fares, recent data is showing rising corporate ticket prices. Germany is a key example of this where the average price paid by corporate travelers has increased significantly. This makes it increasingly important to compare public fare announcements with your average booked prices to ensure your program remains competitive.
Meanwhile, rental car pricing remains elevated. Increases are being driven by labor shortages and constrained fleets in the UK, along with strong seasonal demand in key markets like France, Spain, and Italy.
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 Q3.
Air program focus areas
With pricing volatility, surcharges, and capacity constraints continuing to build, you can’t afford to wait for things to settle. Now is the time to reassess whether your negotiated discounts, targets, and overall supplier strategy still hold up under current conditions. At the same time, strengthening advance booking behavior is one of the most immediate levers to control costs. Clearer guidelines, tighter approvals, and ongoing traveler education can help secure better availability, avoid peak pricing, and maintain stronger budget control.
Hotel program focus areas
As you kick off the 2027 hotel sourcing season, be clear about what “value” really means to your organization, and what it doesn’t. Suppliers are increasingly shifting the conversation away from rate and toward “total value,” packaging in amenities and headline discounts to reframe the discussion. But much of this value is perceived, not realized.
Don’t let bundled extras or percentage-off claims distract from the underlying economics. A higher base rate paired with “included” benefits is still a higher cost if those benefits go unused, are inconsistently delivered, or fail to drive measurable behavior. In many cases, the narrative of value outpaces the actual return.
True value remains grounded in the fundamentals: competitive, transparent rates; reliable availability (especially during peak periods); and the ability to drive in-policy booking behavior. If those elements aren’t strong, no amount of added amenities will close the gap. Successful programs will focus on intentional market selection, establish realistic rate negotiation targets, and actively pressure-test supplier value claims during sourcing – separating what sounds compelling from what truly performs.
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 Q3 2026 and Q3 2025. The result is a reliable report based on published prices 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!