Travel Costs Will Rise, Says CWT 2014 Travel Price Forecast
Travel costs worldwide will rise moderately next year, according to Carlson Wagonlit Travel’s (CWT) 2014 Travel Price Forecast. This projection reflects limited global economic growth.
Exceptions to the global forecast are Europe, where prices “are likely to decrease because of the continued economic uncertainty in the region,” and emerging markets like Argentina, which “could experience far higher increases in 2014 due to high projected GDP growth and significant inflationary increases,” said Christophe Renard, vice president, CWT Solutions Group, in a statement.
Specifically, the airline segment will remain dynamic in 2014, due to code-share agreements, alliances and mergers, the forecast said. At the same time, more low-cost carriers are entering the global market, applying pressure on legacy carriers’ fares and offering new products and services aimed at business travelers.
Latin America and the Asia-Pacific region are expected to see a rise of up to 4 percent in air prices, although fares vary throughout the regions. In Europe, the Middle East and Africa, airfares could rise by as much as 3.1 percent. And in North America, airfares may increase by about 2.6 percent.
Hotels in key business destinations will operate at near capacity throughout 2014, according to CWT. While some destinations will see their highest rate increases in decades, much of Europe will see a decline due to the ongoing economic uncertainty.
Hotel rates in Latin America may increase by up to 5.8 percent, while Asia-Pacific’s largest cities will continue to have the high occupancy rates they’ve had for several years, with prices set to rise by up to 4.9 percent. Hotel rates in Europe, the Middle East and Africa fluctuate from a 2.5 percent decrease to a 1.6 percent increase. Nevertheless, European cities with high demand will increase their nightly room rates, while Middle Eastern hotels are expected to increase room rates by up to 2.5 percent, and African properties are expected to increase rates by about 2.1 percent. North America will see hotel rate increases of about 3.9 percent.
Car rentals and ground transportation worldwide will likely see small price increases next year. Latin America may see price increases of up to 3.6 percent in its car rental market. Asia-Pacific might see car rental rates rise by up to 5.5 percent, although China’s high-speed rail service “will see strong interest from travel buyers in 2014,” according to CWT. Car rental prices across Europe, the Middle East and Africa will fluctuate, ranging from a 4 percent increase in Russia, Germany and the U.K., to a 1.2 percent decrease in Italy and a 4 percent decrease in Spain. Meanwhile, Italy’s train system is starting to compete with air on some domestic routes, and France’s recently launched low-cost rail provider, Ouigo, could put a similar pressure on airlines in the country, CWT said. North America could see price increases of up to 2 percent for car rental.
CWT anticipates that meetings and events providers will raise prices around the world next year, which could prompt planners to maintain or cut group size compared to 2013.
Latin America will see the highest price increases for daily attendees, ranging from 4 percent to 7 percent. As a result, group size in the region will fall by as much as 2 percent, and the region may see a switch to domestic instead of international meetings. In Asia-Pacific, “a booming M&E industry” will see group size increase 3 to 5 percent, while daily costs per attendee will rise 4 to 5 percent. Daily attendee costs will remain flat in the Eurozone, while attendee numbers could drop by as much as 3 percent. In North America, group size is expected to increase by up to 1.5 percent, leading to daily attendee costs rising as much as 5.5 percent.
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