Intercontinental airfares in the second quarter should rise
year over year amid growing corporate travel demand and limited capacity, according
to Advito's quarterly Travel Price Index, released Monday. Domestic U.S.
airfares, however, could begin to slip as economic concerns begin to affect
demand, particularly in the economy cabin.
Advito projects Q2 business-class intercontinental fares
originating in North America to increase 3 percent year over year, and those originating
in Europe to rise 4 percent. Advito cited increased demand for those products,
particularly due to what it called "enforced capacity discipline"
because of "delays in aircraft deliveries and maintenance issues."
Business-class intercontinental fares originating from Asia
and the Middle East in the second quarter each also are projected to increase 3
percent year over year, according to Advito, which noted "geopolitical
tensions" contributing to the fare hike.
By contrast, Advito projects domestic economy fares in North
America to decline 2 percent year over year. "Economic concerns are
starting to hurt travel demand in the U.S. domestic market," according to
the report, which also cited "increased activity" from low-cost
carriers.
Advito, the consulting arm of travel management company BCD
Travel, calculated the Travel Price Index by using predictive analytics based
on future shopping data.
Advito projected the second-quarter global average hotel
rate to hold steady year over year, noting "the easing of leisure and
business travel demand is driving more moderate cost increases in many markets."
The firm projects second-quarter car rental rates in the
United States to increase 3 percent year over year, citing suppliers'
fleet-rotation strategy, which Advito said would entail a
"significant" selloff of vehicles, leading to a 5 percent decrease in
rentable vehicles, enabling suppliers to maintain pricing. Hertz
Corp. and Avis
Budget Group last month detailed their fleet-rotation strategies.
RELATED: Advito's
Q1 Travel Price Index