While fourth-quarter economy-class intercontinental fares
are showing signs of softness, increasing corporate travel demand appears to be
bolstering such business-class fares, according to a new report from
consultancy Advito.
Advito projects average fourth-quarter economy-class
intercontinental fares in every global region except Asia to decline year over
year, including a 3 percent decline in North America and a 5 percent decline in
Europe, which Advito in its quarterly Travel Price Index attributes to "geopolitical
uncertainty and economic slowdown."
However, Advito projects average business-class intercontinental
fares to increase year over year in every global region except Latin America
and North America (where in each region they are projected to decline 1
percent).
"The gradual recovery of corporate travel combined with
the attraction for premium cabin options helps maintain fares at a high level in
business cabin," according to Advito, which is the consulting arm of
travel management company BCD Travel.
Domestic fares in both premium and economy class are set to
increase "modestly" on the whole, though with regional variation as
"a strict capacity discipline driven by aircraft shortages and network
rationalization contributes to rising fares." Several carriers have
implemented capacity cuts in the second half of 2025 after demand softened in
the spring.
Advito said it uses predictive analytics to produce airfare
calculations based on fare availability for the fourth quarter in global
distribution systems, weighted toward October travel prices.
Advito projected the overall fourth-quarter average global hotel
rate to increase 1 percent year over year, including a 6 percent increase in
Europe and little change in North America.
"The increase in business travel demand is driving more
moderate/strong cost increases in many markets," according to Advito.
Advito projects the average fourth-quarter U.S. hotel rate
to decline 1 percent year over year. The consultancy cited New York, Chicago,
San Francisco and Boston as cities showing "strong" rate increases,
while Houston, Orlando, San Antonio, Las Vegas, Dallas and Denver "have price
decreases."
Advito said its hotel projections were based on predictive
analytics around flexible best available rates available in GDSs and online
travel agencies.
Advito projects fourth-quarter U.S. car rental rates in the
United States to decline 1 percent year over year, citing improved utilization
of supplier fleets and "softer commercial demand."
RELATED: Advito's
Q3 Travel Price Index