American Express Forecasts Business Travel 2016
by Anna Gleksman /American Express’s new Global Business Travel Forecast for 2016 predicts moderate growth in prices for air, hotel, and ground transportation in the corporate-travel market.
In the United States, the cost of airline tickets will likely rise by 2%-3%, hotels will rise 4%-6%, and car rentals will rise 1%, the survey said.
North America Forecast
In North America, short-haul flights, increased competition, and growth among budget carriers will help keep price increases below 3%. Fares on long-haul flights are expected to range from .4% to 2.9%; the high end will likely come on routes to Asia and Latin America. In Canada, prices should remain flat, from -1.5% to 1.1%, for both short- and long-haul flights as a result of strong competition and the lower price of oil.
Source: American Express Global Business Travel Forecast 2016
Hotels are expected to increase in price by 4%-6%, with the upper-range hotels rising slightly more than the mid-range.
Ground transportation rates will increase just 1%, thanks to overcapacity and strong competition globally. Ride-sharing services, such as Uber and Lyft, are expected to see greater mainstream adoption and expansion in 2016.
Latin America Forecast
In Latin America, air travel will continue to decrease in cost across the board for 2016. The depreciation of the Brazilian real and other local currencies against the U.S. dollar and the euro will further lower domestic demand for international air travel.
Latin America Airfare, Hotel and Car Rental Forecast
Europe, Middle East, and Africa Forecast
European air prices for 2016 are projected to remain stable, though the cost of premium seats is expected to increase by 3%. Lo- cost carriers will place strong downward pressure on fares throughout Europe, particularly on short- and long-haul routes to Asia.
In the Middle East, rapid capacity growth by Gulf carriers and continued weakness in the region’s oil-based economies are generally pushing prices down by 2%, with the exception of premium long-haul fares. In Africa, fares are expected to increase up to 5%, as a result of factors such as high operating costs, a lack of low-cost carriers (outside of South Africa), and stringent intra-continental regulation.
The average daily rates for ground transportation in Europe, the Middle East, and Africa are all expected to rise in 2016 on higher additional expenses. Car-sharing services will also see significant growth in 2016 even as major car-rental companies expand in this area.
EMEA Airfare & Car Rental Forecast
In Europe the larger cities will see the most growth where the euro is weakening causing an increase in tourism. With not much hotel prices will be increasing by about 2%-3.5%. In the Middle East and Africa, an increasing inventory of. In the Middle East and Africa, an increasing inventory of mid-range offerings will provide travelers with more affordable choices, but rates will still rise 2-3.5% as well with stronger economics in 2016. (Though it remains to be seen if the
EMEA Hotel Forcast
Asian Pacific Forecast
In Asia-Pacific, airfare prices across the region are expected to show moderate growth across both business and economy classes in 2016. Domestic economy fares are expected to see the strongest fare hikes within the region. Also, China will show a small increase in fares as demand, especially from the middle class, keeps up with capacity and carriers expand their long-haul networks. Increases will also be strong in India as the economy booms and poor ground infrastructure push more travelers to require air options.
APAC Airfare Forecast
Source: American Express Global Business Travel Forecast 2016
Affordable and luxury hotels in Asia-Pacific are likely to experience moderate growth in 2016, depending on the market. As the anti-corruption campaign for government officials still impacts luxury hotels across China, the country has a strong demand in higher average daily rates and occupancy numbers. Favorable exchange rates and limited inventory is the basis behind rate hikes in Sydney and Tokyo, but the end of the mining boom has the opposite effect in the western half of Australia.
APAC Hotel Forecast
