Global airfares are likely to remain flat year over year,
while global hotel rates will increase by 1 percent to 3 percent, BCD Travel's
Advito consultancy outlined in its 2017 industry forecast.
Airfares
The ongoing low level of oil prices have allowed airlines to
add or maintain capacity, which means rates should remain the same or drop in
competitive regions next year, according to Advito. The consultancy expects
global business class fares to rise 1 percent in 2017 and economy fares to
remain flat but cautions travel buyers to "expect greater variation in
fares from region to region" (see
Airfare forecasts below). Regional business class fares, for instance, will
vary widely. Economy fares, meanwhile, will remain flat or decrease except in
Europe.
Source: Advito's 2017 forecast
Hotel Rates
North America will lead the charge for global hotel rate
increases in 2017 (see Hotel rate
forecasts below). Not far behind are the Southwest Pacific and Middle
East, where a favorable split in supply versus demand will drive increases. Brexit,
changes in political leadership and security concerns stand to detract from
what could "have been a strong seller's market in 2017" in Europe.
Source: Advito's 2017 forecast
Strength in hotel pricing translates to more challenging
conditions for meeting planners 2017. In North America, the persistent rise in
select-service hotel construction during the past six years has meant a
scarcity of meeting space that will still be present next year, in spite of new
supply coming onto the market. Similarly, hotel supply in Europe isn't keeping
up with meetings demand, and buyers could face challenges when it comes to
finding space and negotiating discounts. In Asia, however, supply has kept pace
with demand, and prices shouldn't increase too much for meetings in 2017,
though availability could be more challenging than in 2016.
Car Rental Rates
Advito's forecast provided no solid price-change
predictions for the car rental sector. Instead, in North America, the most popular
region for car rentals, it said: "There is no reason to believe the
long-running buyer’s market will change next year, but watch out for rental companies
dreaming up new ways to inflate the final bill."