Travel costs are expected to rise in 2019, with hotel prices rising 3.7% and flight prices increasing 2.6%, according to the Global Travel Forecast, published by Carlson Wagonlit Travel and Global Business Travel Association (GBTA) with the support of the Carlson Family Foundation. This fifth annual report, which was released on July 24, 2018, cites a growing global economy and rising oil prices as the drive behind this predicted rise.
“Prices are expected to spike in many global markets even as inflation remains subdued,” said Kurt Ekert, president and CEO, Carlson Wagonlit Travel. “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.”
The 2019 forecast also includes business travel industry trends and developments.
“The future of corporate travel can be summed up as accelerated personalization—with mobile technology, AI, machine learning and predictive analytics all playing their part,” said Ekert. “Success is tied to technology, with sophisticated data-crunching at the very heart of it.”
2019 Hotel Projections
According to the Global Travel Forecast, the hotel outlook for 2019 will be driven by the overall increase in air travel, which will fuel demand for rooms. Technology will also play an important role.
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 midscale ones due in part to a growing appetite for boutique accommodation among younger travelers—will also be on the agenda.
- In North America hotel prices will go up 2.1 percent, with a 5 percent rise in Canada and a 2.7 percent increase in the U.S.
- Within Latin America, hotel prices are expected to fall 1.3 percent, with declines in Argentina, Venezuela, Brazil and Colombia. However, Chile, Peru and Mexico are expected to see increases.
- In Asia Pacific, hotel prices are likely to rise 5.1 percent—with a large discrepancy as Japanese prices are expected to fall 3.2 percent, but New Zealand is set to rise a whopping 11.8 percent. In Australia, 2019 and 2020 are expected to bring the largest number of new available rooms.
- Hotel rates across Europe, Middle East and Africa are expected to rise in Western Europe 5.6 percent, while declining in Eastern Europe and in the Middle East and Africa. Again Norway will lead with an 11.8 percent increase in rates.
2019 Air Projections
The Global Travel Forecast predicts that the aviation sector will be shaped by the introduction of ultra-long-haul flights and an increasing competition from the low-cost carriers, which are not only multiplying but also fighting for long-haul routes—and by the airlines’ push towards NDC.
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.
- North America will see air travel prices rise by a modest 1.8 percent. In the U.S., airlines are recalibrating to reflect better areas of demand, depending on how trade relationships change with key U.S. allies and adversaries.
- Prices across Latin America are expected to drop 2 percent in 2019. However, Mexico and Colombia will see slight increases, while Chile will experience a rise of 7.5 percent.
- 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 vast majority of countries in the region will see price rises, except in Japan. Prices there will likely drop 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 and African countries, on the other hand, will experience a decline of 2.3 percent and 2 percent respectively.
2019 Ground Transportation Projections
The Global Travel Forecast reports that ground transportation pricing is expected to rise only 0.6 percent in 2019 in North America, while prices in the rest of the regions will remain flat. However, by the fourth quarter of 2019, a concerted effort by rental companies to raise prices is predicted.
In North America, the projected increase for corporates is 6 percent.
The forecast cites that 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 with on-demand, shared, electric and connected cars becoming more popular.
- In North America, Canada is expected to see a 3.6 percent ground transportation cost increase in 2019, but the overall region will only be up 0.6 percent.
- Ground transportation prices in Latin America will also remain flat overall, with strong decreases in Argentina and Brazil and a more moderated one in Mexico.
- In Asia Pacific, ground transportation rates will stay flat overall with increases in markets like New Zealand, India and Australia.
- Prices in Europe, Middle East & Africa are expected to remain flat overall. However, countries like Finland, France, Germany, Italy and Spain will see increases of over 4 percent.