American Express Global Business Travel on Thursday released its 2015 pricing outlook in which it forecast worldwide air, hotel and rental car pricing "to be neutral to slightly higher across all regions," with variance across geographic markets and supplier categories.
On tap for the United States are low-to-mid-single-digit percentage increases in each of the three major travel supplier categories. Europe, meanwhile, will see a mix of increases and decreases. Asia pricing should be up, but at a slower growth rate compared with recent years, while Latin America projections range from modest declines to modest gains.
Amex cited an "improving economy" and "capacity discipline" by airlines in North America as it projected airfares in the region would rise across the board next year: Short-haul business-class fares are projected to grow year over year between 2 percent and 6 percent, long-haul business class will be up between 1 percent and 4 percent, short-haul economy is projected to increase between 2 percent and 5 percent and long-haul economy should be up no more than 3 percent.
North American hotel rates, meanwhile, are projected to be "buoyed by favorable economic growth, increasing demand, and a lack of new inventory," according to Amex. "After an extended period of relative weakness, hotels are looking to capitalize on favorable market dynamics to increase profitability."
In North America, average mid-range hotel rates are expected to increase up to 6 percent year over year, with upper-tier rates up between 3.5 percent and 7 percent from 2014 levels.
Car rental base rate growth in North America should be more modest, rising no more than 1 percent, according to Amex, which added that it is "likely that rental companies will work with their customers to keep their corporate rates generally flat next year."
Mixed Forecast For Other Regions
"In 2015, European air prices will likely remain neutral, with the exception of added capacity on transatlantic routes, which may lead to depressed fares in that category," Amex noted.
Overall for Europe, short-haul business-class pricing could decline as much as 5 percent year over year, with long-haul business pricing roughly flat and short-haul economy up no more than 2 percent. Long-haul economy could range from down slightly to up 2 percent.
Including the Middle East and Africa, Amex noted that "hotel rates are predicted to rise slightly in nearly all countries and categories across EMEA, as demand steadies."
Mid-range hotel rates across EMEA should rise between 1 percent and 6 percent, with upper-tier average rates up no more than 5 percent.
In Asia/Pacific "lower prospects for economic growth compared to the robust levels of years past will likely impact business travel pricing in 2015." While travel pricing growth is not expected to be as high as in years past, Amex still projected modest year-over-year pricing gains. "Individual country predictions tend to be positive, with variability throughout the region," Amex noted.
In Asia/Pacific, domestic airfares in both business and economy classes are projected to be flat to up 3 percent, as international business class could be slightly down or up 2 percent. International economy could swing from down 1 percent to up 1 percent. Meanwhile, intra-region airfares are projected to be flat to up 2 percent.
Across Asia/Pacific, hotel rates at both mid- and upper-tier properties should rise no more than 3.5 percent, Amex projected.
Pricing in Latin America should mostly increase in 2015, though Amex highlighted "differing levels of economic growth for countries in the region," leading to variance.
"Increased competition from European and American air carriers looking to expand their service offerings is expected, though airfares are predicted to rise slightly overall," according to Amex.
Projections for Latin America short-haul business-class fares range from a slight decline to up 3 percent year over year. Long-haul business class should rise between 2 percent to 5 percent, with short-haul economy slightly down or up 3 percent and long-haul economy rising no more than 3 percent or declining 2 percent.
Meanwhile, Latin America daily hotel pricing, including mid- and upper tiers, is projected to rise between 5 percent and 8 percent. Car rental base rates in Latin America are expected to be up around 2 percent year over year.