Airfares and hotel rates continue to stabilize with modest cost increases
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
We are starting to see domestic and regional fares decline in the US amid low-cost carrier competition and rising economic uncertainty. However, intercontinental business fares to most destinations are on the rise while economy fares are stabilizing due to increased demand for business travel boosting demand for premium segments. The Southwest Pacific region is the only area where we are seeing a drop in fares out of North America, across both economy and business class.
While most US markets are experiencing moderate hotel rate increases, Houston is facing a significant double-digit spike. For most Canadian markets, rates are on a downward trend. Overall, we are seeing North America occupancy levels trending marginally above 2024.
Rail prices in North America continue to decline, providing a unique opportunity for a shift from air to rail in the Northeast Corridor with Acela. Year over year we’ve seen fares decrease on three key travel routes from New York including Washington, Philadelphia and Boston. Fleet rotations by car rental suppliers are resulting in smaller fleets and a modest uptick in daily rental rates.
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 as we head into the second quarter of the year.
Air program focus areas
With additional carrier-imposed charges now accounting for close to 20% of the total ticket price, it’s important to understand how these additional costs influence your negotiated fares. As you enter negotiations, evaluate year-over-year surcharge increases, as corporate discounts won’t apply to taxes and surcharges. Now is also a great time to identify areas where you can adopt the new airline retailing model to drive value. Start by recognizing which airline fares, benefits and services are important to your program. Plus, if you haven’t already, assess suppliers from a sustainability perspective, considering metrics like fleet efficiency, SAF strategy and more.
Hotel program focus areas
Keep a close eye on rate performance in Q2. The first quarter of the year typically reflects a strong Average Booked Rate (ABR) due to seasonally lower Best Available Rates (BAR). However, as market conditions evolve throughout the year, it’s crucial to monitor these trends and be prepared to challenge underperforming areas. It’s also a great time to evaluate program adoption and consider new ways to drive incremental savings. Today’s travelers expect full visibility into all available rates at the time of booking, ensuring they can secure the most competitive and reasonable option. A key way to ensure rate transparency and optimize spend without compromising the traveler experience is to incorporate non-GDS content alongside your TMC-negotiated rates.
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 Q2 2024 and Q2 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? Access your copy of the full report with an interactive breakdown of each region here!