Hotel rates and premium airfares climb as corporate travel picks up
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: Europe
This quarter, we’re seeing a clear split in intercontinental airfare trends. Business class fares are climbing, fueled by stronger corporate demand and higher carrier surcharges. Economy fares, on the other hand, are heading in the opposite direction, likely a result of softer leisure travel as economic uncertainty continues to weigh on consumer behavior. Meanwhile, domestic and regional fares are climbing across business and economy, continuing their year-over-year upward trend. While demand plays a big role here, reduced flight availability in major markets like Germany, France, and the UK is also tightening supply and nudging prices upward.
Most markets across Europe are showing strong year-over-year (YOY) and quarter-over-quarter (QOQ) increases in the best available rate (BAR), with several countries expected to see double-digit jumps in Q4. The biggest YOY increases are expected in Iceland, Croatia, Poland, Portugal, Ireland, Greece, Turkey, Luxembourg and Switzerland as demand holds strong.
Rail fares are trending up across much of Europe, and it’s not just a seasonal trend. Demand is picking up as more companies and travelers opt for more sustainable options. Plus, with the drop in domestic airline capacity in countries like Germany, France, and the UK, it’s easy to see why rail is becoming the go-to choice for many. Car rental prices are showing moderate increases in Q4. Just like with rail, the shift toward more sustainable travel is driving up interest in more fuel-efficient options, boosting demand for economy, compact and electric vehicles.
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
With airline discounts shrinking, it’s crucial to look outside of supplier negotiations to find cost avoidance opportunities. That includes reassessing travel policies, exploring share-shift opportunities, and making the most of what’s available, especially as NDC adoption grows. Personalized bundles and fare visibility are becoming key levers for savings and traveler experience. And with more fares reserved for direct channels, reinforcing the value of booking within approved tools is essential to avoid air leakage and protect program performance.
Hotel program focus areas
As hotel RFPs wrap up in Q4, the focus shifts from negotiation to execution. Q4 is the perfect time to conduct a post-RFP audit to double-check that awarded rates are live across booking channels and catch any discrepancies before travelers do. Once you’ve ensured awarded rates are loaded accurately and are available across your booking channels, take this time to build internal momentum. Don’t wait for January to start engaging stakeholders, use this time to align with internal teams on program changes, traveler communications, and performance goals so that everyone is prepped for launch in the new year.
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 Q4 2024 and Q4 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!