BCD Travel reveals 2024 travel outlook
Q4 Travel Market Report predicts 0.8% drop in global airfares and 6.8% increase in hotel rates
UTRECHT, The Netherlands, November 30, 2023 – Leading travel management company BCD Travel published the fourth edition of its quarterly Travel Market Report. The Q4 report, dedicated to presenting an outlook for 2024, provides travel managers and buyers with insights on economic prospects, key risks, projected prices for air, hotel and car rental, sustainable travel trends, and more.
Some highlights from the report that corporate travel programs need to consider:
The world economy has managed to confound most forecasters during 2023. But the foundations for future growth may not be as stable as they seem. Even if the economy continues to defy concerns, specific risks that could undermine or derail growth include persistent high interest rates, bond market developments and geopolitical issues.
In addition to these macro risks, BCD’s Global Crisis Management team has outlined several key risks that may impact business travel, such as climate change, cybersecurity, geopolitics, health, polarized politics and rising crime. As part of their Travel Risk Management program, travel managers should not only monitor risks, but also stay abreast of any changes to legislation that might directly affect their travelers.
Recovery in air travel isn’t synchronized around the world. As a result, the factors driving changes to airfares in 2024 will vary by market. In some cases, demand or capacity haven’t yet returned to pre-pandemic levels; in others, the initial rebound may have ended, allowing more normal market conditions to resurface.
Globally, average ticket prices (ATPs) are expected to decrease by 0.8% in 2024. Regional fares should fall by 0.9% and intercontinental fares by 0.5%. At 1.2%, the forecasted fall in global business fares should be steeper than the 0.8% easing expected for economy tickets.
Asia, Europe, Latin America and Southwest Pacific can expect to see ATPs fall by more than 2%. Higher average airfares are only likely in Africa and North America, but the increase in ATPs in these two markets is estimated to be less than 1%.
“Over the past two years, airfares have increased significantly,” said Jorge Cruz, executive vice president of Global Sales & Marketing at BCD. “As a result, using savings as a performance measure has been almost impossible for travel buyers. We advise companies to review their travel policies and their travelers’ booking behaviors to lower the overall cost of their travel programs.”
Global hotel rates are expected to rise by 6.8% on average in 2024. Even as the pace of recovery shows signs of slowing, demand will continue to outpace available supply in many markets. Although numerous projects are underway to increase the number of hotel rooms, these will take time to come online, and development will vary greatly by market. In addition, hoteliers’ concerns about occupancy have given way to a sharper focus on average daily rates and revenue per available room.
Instead of trying to fill every room, hotels seem more willing to accept lower occupancy, limiting availability and then charging higher rates. With inflation so high in many countries, this change in priorities has the added benefit of lowering hotels’ operating costs. Lower occupancy should allow for lower housekeeping costs, for example.
“Hotels have adopted more sophisticated techniques for revenue and yield management in recent years,” Cruz said. “Available rooms at preferred rates have been increasingly more difficult for business travelers to find. While it’s important for travel buyers to negotiate good rates, it’s equally important for those rates to be available when needed. Otherwise, they end up paying market rates, which will increase the cost of their hotel programs in 2024.”
Two-thirds of travel buyers consider environmentally sustainable travel to be very or extremely important. And almost half have formal goals in place to make corporate travel more sustainable. But travel managers will need to do more. Particularly in light of sustainability developments expected for 2024, like new emissions regulations.
“The EU’s Corporate Sustainability Reporting Directive will come into effect in 2024, expanding on existing corporate sustainability disclosures,” Cruz added. “With the U.K., Australia and possibly the U.S. likely to follow, travel suppliers and their corporate clients should anticipate greater demands for data and transparency around their emissions.”
For more details from the 2024 outlook, download the full Travel Market Report.
About BCD Travel
BCD Travel helps companies travel smart and achieve more. We drive program adoption, cost savings and talent retention through digital experiences that simplify business travel. Our 13,000 dedicated team members service clients in 170+ countries as we shape a sustainable future for business travel. For more information, visit www.bcdtravel.com.