Global airfares for corporate travel in the first half of the year have declined year over year despite an increase in demand, while hotel rates increased in most global regions, according to FCM Consulting's Insights Report, published Thursday.
The report, based on corporate booking data from FCM Travel and Flight Centre Travel Group, showed the average business-class fare from January through May was down 4 percent year over year, and the average economy fare was down 3 percent for that same period. While global demand was up 5.8 percent year over year, the decline "is primarily attributable to demand not matching original forecasts and airlines having to adjust pricing strategies to stimulate demand," according to the report.
The report also noted that demand in North America was flat due to the U.S. trade policy and broader macroeconomic conditions.
"As inflation escalates and economic growth hits the brakes, three may be a noticeable decline in travel demand from both businesses and consumers to the United States," the report said. "Airlines, particularly those with extensive international routes, could also face increased operational costs due to retaliatory tariffs and a looming trade conflict."
The average global hotel rate, on the other hand, increased 19 percent year over year to $201 during the first half of 2025, according to the report. Rates were down year over year in Asia and Australia and New Zealand but were up by double-digit percentages in the other regions.
In North America, the average corporate hotel rate in the first half of the year was up $46 year over year to $281, with the largest increases in Chicago, up 39 percent year over year, and New York, up 29 percent year over year. The report said that with occupancy down in the region, it would help mitigate rate increases, but as hotels are facing rising operating costs, that will "limit appeal for hotels to lower rates to attract additional business if needed."
The average corporate hotel rate in Europe in the first half of the year increased $31 year over year to $211, with the largest increases in Dublin (up 55 percent), Madrid (up 23 percent) and London (up 19 percent). The region has been seeing "resurgent business functions" and increased international demand, but rate increases could moderate next year as it will be difficult to maintain high occupancy levels, according to the report.
In Latin America, the average rate was up $15 year over year to $165 in the first half of the year, and the average rate in the Middle East and Africa increased $29 to $226. Asia's average rate was down $1 to $170, and the average rate in in Australia and New Zealand declined $9 to $142.