Travel prices are expected to rise sharply in 2019, with hotels going up 3.7 percent and flights 2.6 percent, driven by a growing global economy and rising oil prices. The findings come from the fifth annual Global Travel Forecast, published this week by Global Business Travel Association and Carlson Wagonlit Travel with the support of the Carlson Family Foundation.
“Prices are expected to spike in many global markets even as inflation remains subdued,” said Kurt Ekert, president and CEO, CWT. “The report explores the causes and includes an overview of what we expect to see in key markets worldwide. It also gives specific recommendations, giving travel managers ammunition for their upcoming negotiations.”
2019 Air Projections
Airfares are likely to become more expensive due to rising in oil prices, the competitive pressure from the shortage of pilots, potential trade wars, and increasing fare segmentation to improve yield.
Asia Pacific expects to see a 3.2 percent rise in 2019 pricing. Chinese demand remains high and by 2020 the country is expected to become the world’s biggest air travel market. The only exception in this booming region is Japan. Prices there will likely drop 3.9 percent due to the country’s added capacity in preparation for the Olympic Games in 2020.
Across Europe, Middle East and Africa, air travel is anticipated to continue growing in Western Europe, with prices rising 4.8 percent. Eastern Europe and the Middle East & African countries, on the other hand, will experience a decline of 2.3 percent and 2 percent respectively.
Prices across Latin America are expected to drop 2 percent in 2019. However, México and Colombia will see slight increases –0.1 percent and 1.2 percent respectively– while Chile will experience a rise of 7.5 percent.
North America will see prices rise by a modest 1.8 percent.
2019 Hotel Projections
The hotel outlook for 2019 is driven by the overall increase in air travel, which will fuel demand for rooms. Technology will also play an important part. Hotels are introducing new developments to personalize the guest experience. The increase of mobile penetration, on the other hand, is forcing travel managers to offer their travelers apps, which also serve to accommodate greater in-policy booking autonomy.
Further mergers--and upscale hotels competing with mid-scale brands due in part to a growing appetite for boutique accommodation among younger travelers--will also be on the agenda.
2019 Ground Transportation Projections
Next year, ground transportation pricing is expected to rise only 0.6 percent in North America, while prices in the rest of the regions will remain flat. However, by the fourth quarter of 2019, the survey predicts concerted effort by rental companies to raise prices. In North America, the projected increase for corporates is 6 percent.
2019 will also see a growing preference among travelers for ride-hailing apps while interest in high-speed trains is fading, due to high network costs and low-tech distribution systems.
Mobile mobility will rise. On-demand, shared, electric, and connected cars will all become more popular. Connected car technology has the potential to change the entire automotive industry, the survey says.
For more detailed information, download the 2019 Global Travel Forecast here.