By Mike Eggleton, Senior Manager, Analytics and Research, BCD Travel
In conversations with our regional experts for the 2018 Industry Forecast this year, a common theme emerged: 2018 will be very much like 2017. This stable outlook for business travel is reflected in the global forecasts for 2018.
We are forecasting a 1% increase for regional and intercontinental business fares as well as regional economy fares globally. We do not expect intercontinental economy fares to change in 2018.
But a closer examination of these figures reveals regional variations in our fares outlook.
While business fares for intercontinental travel will increase in Europe and North America, they’ll fall in Africa and remain flat in all other regions. Regional business fares will increase in all regions except Africa, where they will stay steady, and Latin America, where they will fall slightly.
Economy fares for intercontinental travel will stay flat or fall, with the biggest decreases for flights from Africa and the Southwest Pacific. The outlook for regional economy fares is more mixed. Four regions will see increases, while fares won’t change within Africa and the Middle East, and Latin American fares will fall.
We forecast a 2% to 4% rise in global hotel rates overall but once you start looking at the detail, some big regional differences emerge. Massive pent-up demand for quality accommodations will ensure large average daily rate (ADR) rises in Africa. Insufficient new supply will drive ADR increases in Southwest Pacific.
Improving economic conditions suggest travel demand will continue to strengthen. If this is accompanied by higher oil prices, airfares may start trending upwards, particularly in markets with the strongest demand. And there are signs that the pricing power, which hotels in North America and Europe have enjoyed for several years, may soon pass its peak.
If you want to find out more about our forecasts for 2018, download a copy of our 2018 Industry Forecast at https://www.advito.com/2018-industry-forecast.