The federal budget sequester has hurt demand in North
America and airline capacity controls haven't kept up, prompting BCD Travel's Advito
to reduce 2013 projections for business and economy intercontinental airfare
increases to 0 percent from 2 percent. Expectations for business and economy
fares within the region are unchanged at 1 percent and 3 percent, respectively.
The consultancy cited weaker-than-expected economic growth in
the first part of the year, but said it expected "slow and steady"
corporate travel demand in the second.
The only region with expectations for year-over-year airline
capacity and traffic growth in excess of 10 percent, the Middle East, also is
near the top of Advito's projected fare increases by region. Yet, the company
now projects 5 percent growth for Middle East regional business class and intercontinental
business and economy fares—all down from earlier projections of 9 percent
growth. The Middle East regional economy fare projection remained unchanged at
5 percent growth.
Advito also revised slightly downward its airfare growth expectation
for certain categories in Asia, where "strong capacity growth is making it
difficult for airlines to raise prices in a cautious travel market,"
according to its report. Meanwhile, airfare growth projections were unchanged
in Africa, Europe and Latin America.
Regional forecasts for hotel rates largely were unchanged,
but softer demand prompted Advito to lower forecasts in North America, where
the average daily rate forecast range now is 4 percent to 7 percent, versus the
previous forecast of 6 percent to 7 percent. Hotel rate growth projections are highest
in Latin America, ranging from 9 percent to 12 percent.
Advito's estimates are based on air and hotel transactional
data available through March 2013 and macroeconomic and industry indicators as
of April 2013.