Global demand for corporate
travel during the second quarter grew more than 10 percent from the same period
in 2009, helping to lift global airfares upward, according to an examination of
BCD Travel client data by its consulting arm, Advito, released this week.
"Airfares in the second
quarter rose sharper and faster in North America and Asia-Pacific than
originally anticipated as these regions emerged from the global economic crisis
more quickly than other regions," Advito reported this week. "Other
parts of the world, most notably Europe, did not improve as rapidly—but travel
buyers everywhere can expect to pay more for their air travel by the end of
this year than they did in 2009."
Given the building fare
momentum in some regions, Advito said it is revising its 2010 forecast, last
updated in March. Advito said flight bookings in North America were 20 percent
higher in the second quarter this year, compared with the same period in 2009.
Advito now expects intercontinental business fares from North America to grow
by 8 percent this year, compared with its previous 5 p ercent
growth outlook. Domestic economy fares, meanwhile, are expected to grow by 9
percent in 2010, compared with its previously targeted 6 percent growth rate.
Asia is seeing the most
upward revision, as Advito now expects intercontinental business fares to grow
by 10 percent this year, compared with 6 percent growth rate in its previous
outlook. Intercontinental economy fares, meanwhile, are expected to grow 9
percent this year, compared with the previously targeted 4 percent.
BCD's fare outlook for
Europe, however, remains largely stagnant compared with its March forecast,
with intercontinental business fares still expected to grow this year by 3.5
percent, intercontinental economy by 2.5 percent and regional business fares
declining 2 percent. The only change in the European air outlook come in
regional economy fares, which Advito in March expected to grow by 2 percent,
but now is targeting a 1 percent decline.
Commenting on whether the
growth rates will sustain, Advito vice president Bob Brindley in a statement
said, "We reckon the answer is yes, depending on two things happening. The
first factor is the ability of airlines to maintain their capacity discipline,
as has been the case for the last 18 months. One more quarter of strong
increases in demand could tempt some carriers to expand their fleets." The
other factor is whether relative strength in North America and Asia-Pacific
economies continue to offset currency and debt concerns in Europe. "If
those problems escalate into a Europe-wide crisis, worldwide business travel
could take a second dip globally, but right now buyers should budget for the
likelihood of higher air costs," Brindley said.
For hotels, Advito revised
downward rate growth in Latin America—where rates still are expected to grow,
but by a more modest 4.5 percent—as well as in Europe, the Middle East and
Asia/Pacific, where hotel rates are expected to fall by a greater magnitude
than previously predicted. Advito held steady its rate predictions in North
America and Africa, at -1.6 percent and 7.5 percent, respectively.
"A sluggish recovery in
some advanced markets, including Europe, and an abundance of room capacity in
developing and emerging markets is keeping hotel rates down," Advito said
in the report.