Travel Industry News at TravelNewsAsia.com since 1997
Thu, 11 August 2022

New Global Business Travel Forecast Predicts Prices to Continue Increasing Through 2023

(11 August 2022, 12:02 +07)  According to the 2023 Global Business Travel Forecast, published on Wednesday by CWT and the Global Business Travel Association (GBTA), global travel prices are predicted to continue to increase for the remaining months of 2022 and throughout 2023.

Rising fuel prices, labor shortages and inflationary pressures in raw material costs are the primary drivers of the expected price growth, according to the report, which uses anonymized data generated by CWT and GBTA, with publicly available industry information and econometric and statistical modeling developed by the Avrio Institute.

What we are seeing now are multiple factors coming into play when corporate travel buyers and procurement officers model their travel programs. This eighth joint annual forecast marries statistical travel data and trend analysis with macroeconomic influences to provide a cornerstone reference point for their corporate business travel planning ahead, said Suzanne Neufang, Chief Executive Officer of GBTA.

The world economy shrank 3.4% in 2020 in one of the worst declines since World War II.

Service sectors, including travel and hospitality, were hit especially hard, but the global economy recovered briskly, rising off the lows of 2020 and increasing 5.8% in 2021. Economic growth is moderating as the recovery lengthens, although another recession is a growing concern. The current base case scenario for 2022 is for 3% growth, followed by 2.8% growth in 2023.

Cautionary notes also highlighted in the 2023 Global Business Travel Forecast, highlight the three main forces exerting pressure on the economy and the business travel industry. These include Russias invasion of Ukraine coupled with other geopolitical uncertainties, inflationary pressures that are pushing costs higher, and the risk of further COVID outbreaks that could restrict business travel.

Conversely, with businesses ranking sustainability among their top priorities and reflecting the accelerated importance of combating climate change, the report highlights greater visibility at the point of sale for greener travel options, as well as carbon foot-printing, and environmental impact assessment is an opportunity for the travel industry to actively assist in responsible choice-making.

Prices have increased in all regions across most categories of spend, fueled by pent-up demand, a desire to build company culture and an uncertain economic outlook. The cost-per-attendee for meetings and events in 2022 is expected to be around 25% higher than in 2019, and its forecast to rise a further 7% in 2023.

Alongside pent-up demand, corporate events are now competing with many other types of events that were cancelled in 2020. And, with many companies having given up office space during the pandemic in favor of remote working, they are now booking meeting spaces when staff gather in person, further fueling demand.

Shorter lead times for events, varying from one to three months versus six to 12 months, are also contributing to this perfect storm, perhaps underscored by corporate concerns that the situation they face today could change very rapidly. This is particularly noticeable within Asia Pacific, which has been slower than other regions to re-open post-pandemic, with ongoing restrictions in China prompting clients to make sure their events can go ahead, and as quickly as possible.

Air Travel

Business travel airfares fell over 12% in 2020 from 2019 followed by an additional 26% decline in 2021. Economy ticket prices fell over 24% from 2019 to 2021, while premium tickets fell 33%.

Man walking at Suvarnabhumi Airport (BKK). Picture by Steven Howard of TravelNewsAsia.com Click to enlarge.
Man walking at Suvarnabhumi Airport (BKK). Picture by Steven Howard of TravelNewsAsia.com

Prices are expected to rise 48.5% in 2022, but even with this steep price increase, prices are expected to remain below pre-pandemic levels until 2023. Following an increase of 48.5% in 2022, prices are expected to rise 8.4% in 2023.

Rising demand and continued price rises on jet fuel, which have seen prices more than double in some markets to over $160/barrel according to S&P Global, are putting upward pressure on ticket prices.

Premium class tickets comprised over 7% of all tickets purchased in 2019. The share of premium class tickets fell to 6.5% in 2020 and to 4.5% in 2021 but have started to rise in 2022. Through the first half of the year, premium tickets made up 6.2% of all tickets purchased. A rising share of premium class tickets will result in higher average fares as average ticket price comprises economy and premium.

International and cross border bookings are recovering across most regions which will result in a higher share of international ticket bookings and a corresponding higher average ticket price despite uncertainties caused by the war in Ukraine. Following two years of minimal to no expenditure, business travelers are likely to be willing to spend more on tickets, especially as availability reduces due to labor shortages. This upward trend is largely due to widespread vaccine rollouts and border re-openings.

Hotel

Hotel prices fell 13.3% in 2020 from 2019 and a further 9.5% in 2021, however the report expects them to rise 18.5% in 2022 followed by an 8.2% lift in 2023. Hotel prices have already eclipsed 2019 levels in some areas such as Europe, the Middle East & Africa and North America and are expected do so globally by 2023.

Hotel rates have risen sharply in parts of the world including a 22% rise in North America - and a forecast 31.8% across Europe, the Middle East & Africa - driven by an accelerated recovery coupled with continued capacity constraints.

Hotel rate increases were initially driven by strong leisure travel in 2021 but group travel for corporate meetings and events is improving and transient business travel is similarly gaining healthy pace, putting further pressure on average daily hotel rates.

Ground Transportation

Global car rental prices fell 2.5% in 2020 from 2019, before rising 5.1% in 2021. Prices are expected to increase 7.3% in 2022, hitting new highs, and rise a further 6.8% in 2023.

The vehicle industry remains capacity constrained and rental agencies which reduced fleet sizes in the wake of the pandemic, have not yet fully recovered - due in part to component shortages and supply chain disruptions that have reduced global auto production.

Rental agencies have reverted to buying used vehicles to increase fleet sizes and are keeping their vehicles longer. Some agencies are also buying vehicles from auto-makers outside of their historically supported brands.

Skyrocketing prices, vehicle shortages and the need for visibility into carbon emissions from door-to-door are driving corporate travel managers to factor ground transport into full trip planning from the beginning. This is especially true when factoring in the inclusion of electric vehicles, and while widespread adoption may still be a few years away, personal preference should not be underrated.

Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt, said Patrick Andersen, CWTs Chief Executive Officer. Labor shortages across the travel and hospitality industry, rising raw material prices, and greater awareness for responsible travel are all having an impact on services, but predicted pricing is, on the whole, on par with 2019.

Latest videosRunning Lights - Lumefit Premium 360° Reflective Vest Review, Noise Cancelling Ear Plugs for a Perfect Night's Sleep, Steven Howard Outlines Travel News Asia's Video and Podcast Plans for 2023, Amari Watergate Bangkok - 4K Video Interview with Sukamal Mondal, Area GM, Bangkok Riverside Fest 2023 - 4K Video Interview with Frederic Kolde, Business Travel Trends in Asia Pacific - Video Interview with Brett Thorstad, Sabre.

Headlines: Marriott to Expand Portfolio of Fairfield Hotels in Japan  Four Seasons Bangkok Opens 2,500 sqm Wellness Centre  Lionel Ferrari Appointed GM of Anantara Koh Yao Yai Resort & Villas in Thailand  Cathay Pacific Reopens The Deck at HKIA; Unveils Global Lounge Schedule  Lux Collective Appoints Jeremie de Fombelle as Chief Sales and Marketing Officer  Travel Places Launches Sustainable Aviation Fuel Fund  Aeroflot Resumes Service to Three Cities in Kazakhstan; Increases Flights to China  Finnair to End In-Flight and Pre-Order Retail Sales  Running Lights - Lumefit Premium 360° Reflective Vest Review  Qantas to Launch Flights Between Melbourne and Jakarta, Indonesia  PPHG to Open Parkroyal Langkawi Resort on 15 February  Saudia Links Transit Visas to Flight Tickets  Smiths Detection Installs Remote Screening Platform for DHL Express Australia  Emirates Offers Free Night at 5-Star Hotel to Premium Passengers  Air France to Increase Capacity to Beijing, Hong Kong and Shanghai  Etihad Airways to Increase Flights to Frankfurt, Germany  airBaltic Returns Last Q400  Singapore Airlines Launches Free Unlimited In-Flight Wi-Fi for Select Passengers  Ascott Launches New Portfolio of Hotels - The Crest Collection  Five 388-Metre Urban Ziplines Open in Macau  Airbnb Says Thailand #1 Outbound Destination for Chinese Travellers  Onyx Hospitality Strengthens Senior Management Team  Chandrashekar Joshi Moves to Thailand as GM of Hyatt Regency Phuket  airasia Super App Expands Hotel Booking Platform with Archipelago's 40,000+ Rooms  CWT Meetings & Events Upgrades Planning Service with Two Solutions  Thai AirAsia to Launch Flights Between Bangkok and Mae Sot, Thailand  Qatar Airways Launches Thrice Daily Flights to Phuket, Thailand  Minor Opens First Anantara Hotel in France  Asia Pacific Airlines Carried 105.4m Int. Passengers in 2022, Up from 17.4m in 2021  Westin Begins Global Rollout of New Workout Gear Lending Kits  Tourism Australia Appoints Karen Saw as Country Manager Malaysia  Freed Group Acquires Connexus Travel  Embraer Appoints Andreza de Souza Alberto as VP People, ESG and Corporate Comms  Mandarin Oriental Signs Resort in Punta Negra, Mallorca  Boeing to Stream Live Webcast of Last Boeing 747 Delivery  Agoda Adds Shopping Cart to Booking Experience  Norse Atlantic Airways Opens FCO-JFK Ticket Sales  Qatar Airways Expands Avios Redemption Options  First Class of Pilots Graduate United Aviate Academy  Mogadishu FIR Reclassified as Class A Airspace  SITA Partners Zamna Technologies  Noise Cancelling Ear Plugs for a Perfect Night's Sleep  Steven Howard Outlines Travel News Asia's Video and Podcast Plans for 2023  Singapore to Host Inaugural Asia-Pacific Summit for Aviation Safety in March  Yotel Signs First Hotel in Saudi Arabia  Cebu Pacific to Resume Melbourne - Manila Flights  Marriott Upgrades Event Booking Process with GroupSync Marketplace  Aeroflot to Increase Flights to Guangzhou and Shanghai, China  Air France to Expand Caribbean Network  Airbus Helicopters Logged 362 Net Orders in 2022  Marriott Signs First Ritz-Carlton Reserve in South America  Hyatt Signs First Unbound Collection Hotel in Tokyo  Qantas Expands Codeshare Agreement with IndiGo  Etihad Airways to Double Flights to Jakarta, Indonesia  AirAsia X Resumes Flights Between KL and Osaka, Japan  CX Reports December Traffic; Expects Return to Pre-Pandemic Capacity by End-2024  Tom Pieter Van Tuijl Appointed GM of Centara Mirage Resort Mui Ne in Vietnam  Smiths Detection Launches iLane A20  Emirates Tests GE90 Engine with 100% SAF  Accor Targets 250+ Handwritten Collection Hotels by 2030  TAT and Thai AirAsia Promote Secondary Cities in Thailand  Mondrian Singapore Duxton Hotel to Open in March  Uzbekistan Airways Orders 12 Airbus Aircraft  Emirates Promotes Three Attractions in Dubai  Elbit Systems Wins Main Deck Cargo Door Contract for Boeing 777 Freighters  Singapore Smash 2023 to Showcase City's Best Table Tennis Players  Hotel du Cap-Eden-Roc in France to Reopen 14 April  IHG Signs voco Hotel in Gurugram, India  Agoda Reveals Most Popular Destinations for Lunar New Year  Air Serbia Signs Codeshare Agreement with Qatar Airways  Delta Increases Airbus A220 Orders to 119 Aircraft  Jumeirah Bali Appoints Paula Choi as Wellness Consultant  Connexus Travel Appoints Eric Lau as General Manager  Rugby Sevens Returns to Hamilton, New Zealand  CWT Wins Siemens Gamesa Renewable Energy Contract  Accor to Expand Legendary Orient Express Brand to Cruise Market  Emirates to Increase Stansted Flights; Resume A380 Service to Birmingham, Glasgow and Nice  Asia Digital Engineering Opens MRO Facility in Johor Bahru, Malaysia  Marriott Signs Three Hotels in Brazil  Malaysia Aviation Group Joins UN's Global Compact Initiative  Two Executive Appointments at Diethelm Travel Group  Undisclosed Customer Orders Fifteen E195-E2 Aircraft  Increased Demand in Asia Pushes Finnair to Increase European Flights  Emirates to Resume Direct Dubai - Hong Kong Flights  Hong Kong Airport Handled 5.7 Million Passengers in 2022  Phuket Shines as Aeroflot Names Most Popular New Year Destinations  Thai AirAsia Unveils Amazing Thailand, Amazing New Chapters Aircraft Livery  Wyndham Opens Hotels in Thailand and Vietnam  Etihad Airways to Launch Flights to Copenhagen and Düsseldorf  Rolls-Royce Tests MTU Engine with 100% Hydrogen  Air France-KLM's NDC Content Now on Travelport+  Hyatt Opens Thailand's First Andaz Hotel  Four Seasons Resort and Residences at The Pearl-Qatar Starts Accepting Reservations  Brian Tong Appointed AGM of Waldorf Astoria - Greater China and Mongolia  Amari Watergate Bangkok - 4K Video Interview with Sukamal Mondal, Area GM  Business Travel Trends in Asia Pacific - Video Interview with Brett Thorstad, Sabre  Pictures from Miss International Queen 2022 in Pattaya, Thailand  HD Video Interviews from Miss International Queen 2022 in Pattaya, Thailand  Is Siam Seaplane Ready for Take Off? Interview with Dennis Keller, Chief Business Officer  HD Videos and Interviews  Podcasts from HD Video Interviews  RSS Feed - Travel Industry News  Ticker - Travel Industry News  Travel Industry News Archives  Travel Trade Shows  High-Res Picture Galleries  Travel News Asia - Latest Travel Industry News 

Subscribe to our Travel Industry News RSS Feed Travel Industry News RSS Feed from TravelNewsAsia.com. To do that in Outlook, right-click the RSS Feeds folder, select Add a New RSS Feed, enter the URL of our RSS Feed which is: https://www.travelnewsasia.com/travelnews.xml and click Add. The feed can also be used to add the headlines to your website or channel via a customisable applet. Have questions? Please read our Travel News FAQ. Thank you.

     
Advertising
Advertising
Copyright © 1997-2023 TravelNewsAsia.com