Travel costs in 2024 should increase year over year but not at the "torrid" pace seen in the previous two years, according to Altour's 2024 Industry Forecast.
Airline, hotel and car rental rates all are "stabilizing" this year as leisure travel is returning to the levels seen prior to the pandemic, according to Altour. In addition, capacity across the segments is beginning to meet or exceed demand.
For air travel, Altour projects domestic U.S. airfares will increase 2 percent to 4 percent year over year, although increases in some hub markets could be more than that, given carriers' built dominance in those markets. Airfares between the U.S. and both Europe and Latin/South America will increase 2 percent to 5 percent, according to the travel management company. Costs could decrease in other regions, such as the Asia/Pacific region, the forecast indicated.
Altour also noted the corporate sales agreement negotiations in 2023 yielded fewer discount offerings, particularly in U.S. domestic travel that included hub markets, where companies saw "limited, if any, negotiating ability." International premium travel remains "highly coveted" by airlines and is an area of leverage for travel buyers, and that leverage can be used to achieve better domestic discounts, according to Altour.
For lodging, Altour projects an overall increase in 2024 average daily hotel rates of 2 percent to 5 percent year over year. The TMC's hotel consulting team reported that 2024 rates across its consumer rates are up 2 percent.
That increase is an average of "large fluctuations" among hotel types and markets, according to Altour. Markets servicing a combination of business, leisure and group customers—Chicago, London, Los Angeles, New York and Paris, for example— are projected to have increases above that average, particularly among higher-tier properties, according to Altour. Lower-tier properties, meanwhile, are becoming more dependent on corporate business as the leisure travel boom subsides and will have limited rate increases. Altour said its team has negotiated rates with some hotels in the tier with decreases as high as 10 percent year over year for 2024.
Average daily car rental rates are projected to increase 3 percent to 4 percent year over year in 2024, according to the forecast. Altour said that while supply chain issues have improved for car rental companies, high labor costs, vehicle acquisition costs and inflation still are driving up rates.