Advito Releases 2015 Industry Forecast for Business Travel
Advito Releases 2015 Industry Forecast for Business Travel Demand to grow, airfares holding steady in most markets
CHICAGO, Sept. 8, 2014 – Air travel demand will grow quickly in 2015, as the global economy improves, according to travel consultancy Advito’s annual Industry Forecast. In many regions, especially Asia and Europe, competition is also growing, largely from low-cost carriers (LCCs) on short-haul routes and Middle Eastern airlines in long-haul markets. Even where there’s no change in supply, airlines fear damaging business and consumer confidence by increasing fares too fast. Advito expects airfares to rise little more than inflation, and in some markets they may even stay flat or fall.
The U.S. domestic market is one exception, as consolidation has reduced competition and is pushing up airfares in some markets. However, even in the U.S., airlines are being cautious out of fear that excessively high price increases could negatively impact demand.
Similar to last year, hotels are seeking corporate rate increases of 6% to 8% on average. In North America and Europe, Advito predicts that hotels will raise prices steeply for clients unable to drive business to preferred suppliers. Travel buyers with a strong track record of meeting targets coupled with favorable stay patterns, will successfully contain rate rises yet again.
In Asia, new hotel openings will keep hotel rate increases moderate and enhance buyers’ negotiating positions. But in Latin America, supply is failing to keep up with demand, and higher inflation will likely push up rates. A small number of cities where demand is especially high, like New York, continue to push through much higher rate increases than the rest of the world. This trend will continue in 2015.
Car rental suppliers want to raise corporate rates after years of flat pricing, but Advito doesn’t see any evidence of this in the market. However, the situation has remain unchanged for so long that 2015 may be the year rates finally do go up; probably by no more than 2-4%.
Advito, the consulting arm of BCD Travel, publishes its annual Industry Forecast to give travel and procurement managers a benchmark range of projected prices so they can prepare for supplier negotiations and budgeting. The forecast includes supply, demand and pricing trends for air, hotel, meetings, car rental and rail for all of the major regions in the world. This year‘s forecast also highlights the great YQ (fuel surcharge) box scandal, dynamic hotel pricing and the sharing economy, among other topics.
The Advito 2015 Industry Forecast is available at www.advito.com (in the Resource Center section under “White Papers”).
Advito is the travel industry’s most progressive consultancy, enabling procurement leaders to modernize their approach to managing the travel and meetings spend category. Led by a unique team of multi-disciplinary experts and thought leaders, we work with both clients and suppliers to push the boundaries of traditional air and hotel sourcing and strategic meetings management for higher program returns. We provide advisory, procurement and outsourcing services in the area of corporate travel sourcing, expense and meetings management, along with RFP development and management; benchmarking and vendor management services. We minimize our clients’ travel spend and maximize their travel program value in a data-rich, consumer empowered world. Headquartered in Chicago, Advito operates in key business markets around the world. For more information, visit www.advito.com.
About BCD Travel
BCD Travel helps companies make the most of what they spend on travel. We give travelers innovative tools that keep them safe and productive and help them make good choices on the road. We partner with travel and procurement leaders to simplify the complexities of business travel, drive savings and satisfaction, and move whole companies toward their goals. In short, we help our clients travel smart and achieve more. We make this happen in 106 countries with a global client retention rate of 97%, the highest in the industry. For more information, visit www.bcdtravel.com.
About BCD Group
BCD Group is a market leader in the travel industry. The privately owned company was founded in 1975 by John Fentener van Vlissingen and consists of BCD Travel (global corporate travel management and its subsidiary BCD Meetings & Events, global meetings and events agency) and Park ‘N Fly (off-airport parking). For more information, visit www.bcdgroup.com.