AMSTERDAM-July 24, 2012 -Carlson
Wagonlit Travel (CWT) today released its 2013 Travel Price Forecast,
which indicates that prices in most areas of travel spend are expected
to grow modestly around the globe next year, with the most significant
inflation expected throughout the Asia Pacific and Latin America
regions.
CWT’s forecast combines a statistical model that uses CWT global client
data with the market and industry knowledge of CWT experts around the
world, to provide price projections for every region, as well as
country- and local-level expectations for those destinations to which
CWT clients most frequently travel. CWT’s forecast also addresses the
additional factors that can directly affect overall travel spend and
traveler satisfaction, such as safety and security and use of
technology.
“Price increases in 2013 will begin to level off in most regions
throughout the world compared to what travel buyers experienced in
2012, as booming economies like Asia Pacific’s begin to normalize, and
as uncertainty remains in Europe,” said Nick Vournakis, senior vice
president, Global Product Marketing and CWT Solutions Group. “While
slightly higher prices will be the reality again next year as demand
for travel outpaces supply in most places, our forecast demonstrates
there is still plenty travel buyers can do to watch costs and take care
of travelers through other measures, including reexamining how they
influence traveler behavior.”
Growth in Asia Pacific
stabilizes, bringing modest price increases
The Asia Pacific (APAC) region has experienced strong economic growth
over the past several years, which quickly drove prices upward. Growth
in 2013 is expected to stabilize, which will likely lead to modest
price increases, although specific results vary widely by country.
- Airline prices should increase
about 2.5 percent in the APAC region during 2013, largely due to the
number of low-cost carriers (LCCs) entering the market and holding
pricing down from what would typically be observed in this part of the
world.
- Average daily hotel rates in APAC
will likely increase about 3.5 percent in 2013. Singapore will lead the
way with an 8 percent increase amid strong travel demand and lagging
supply; meanwhile, prices in Hong Kong will also increase more than the
regional average as clients shift from 4-5 crown properties to 3-crown.
- APAC car rental rates will likely
experience the highest inflation of anywhere in the world. CWT
forecasts a 5.9 percent increase in 2013. Rates in Australia and New
Zealand will perform quite strongly due to increased demand and more
tightly managed fleets.
- Meetings & events spending
will increase about 6 percent while group sizes will decrease around
3.8% as organizations attempt to mitigate rising supplier prices by
holding a larger number of smaller meetings with fewer attendees and
shorter durations.
Further details on the
Asia-Pacific
forecast commented by a CWT Solutions Group expert.
Latin America still a focal
point with highest global hotel inflation
The Latin America (LATAM) region continues to experience overall
economic growth, though significant disparities continue to exist that
will create varied travel pricing by country next year. The newly
formed LATAM Airlines, which is now the world’s second largest airline
by market value, will embark on its first full year of operation in
2013, which may result in improved routes and frequencies to, from, and
within the region.
- Two pricing scenarios exist in
LATAM’s air segment. Countries with healthy economies like Brazil and
Chile will experience solid price inflation, while countries with
weaker economies like Argentina, Colombia, Mexico, and Peru expect
moderate decreases to only slight growth. Due to that, CWT expects 2013
airline pricing in the region to increase 1.3 percent overall.
- Average daily hotel rates in LATAM
will likely rise about 6.3 percent during 2013. Brazil will see the
largest increase in hotel rates, and in fact, is the only nation in
CWT’s entire 48-country forecast expected to see double-digit price
increases next year. This is due to strong demand and limited supply;
however, that will soon change, as inventory is rapidly being added in
Brazil to accommodate the 2014 FIFA World Cup and the 2016 Summer
Olympics. Even underperforming economies will experience noteworthy
price inflation given continued international demand amid stagnant
construction pipelines.
- Car rental rates will likely
increase 1.4 percent during 2013, primarily due to U.S.-based brands
expanding operations in the region to meet increasing demand. However,
Brazil-based Localiza is a major player that will offer an added
element of competition to international suppliers in that market
specifically.
- Per attendee per day spending
increases for meetings & events in LATAM will be the highest in the
world, with average increases of 11 percent. Meanwhile, group size will
decrease about 7 percent. As in Asia Pacific, this dynamic will occur
as buyers seek to offset higher supplier costs.
North American economies
steadily improving; rates to follow
While the economies of the United States and Canada are experiencing
slow and steady improvement, there is no major growth expected for the
foreseeable future, which will help contain travel price increases in
2013 for most categories of spend.
- CWT forecasts airline pricing in
North America to increase by 2.8 percent during 2013. Carriers in both
countries will continue to stay disciplined about controlling capacity
to ensure demand outpaces supply, enabling them to raise prices.
- Average daily hotel rates will
likely increase 3.2 percent throughout next year. As always, increases
will vary by market, with the top business destinations able to command
much higher prices. Western Canada will experience particularly high
increases based on an influx of foreign demand for the area’s energy
and mining resources.
- For yet another year, car rental
firms in North America will struggle to raise prices in 2013 as the
marketplace remains highly competitive with only a few existing
suppliers available to battle for corporate business. Given this
reality, CWT forecasts pricing to decrease 1.1 percent.
- Meetings & events spending
continues to grow, with an average 4.8 percent increase expected in
cost per attendee per day, along with an average 6 percent increase in
group size. Booking windows have increased 5% as organizations feel
more confident about the future; given this, advance bookings for 2013
are already strong.
Further details on the
Americas
forecast commented by a CWT Solutions Group expert.
Continued economic uncertainty
in Europe, Middle East and Africa limits price increases
While Europe continues to face mounting economic uncertainty, most
Middle Eastern and African economies are faring reasonably well. As
such, the region overall will experience moderate travel price
increases in 2013, though the tenuous economy could prompt significant
changes at any point.
- Airfares will likely climb 2.5
percent during 2013, as carriers have been diligent in implementing
tight capacity controls that continue to yield high load factors
despite economic concerns.
- Average daily hotel rates will
likely increase 1.3 percent during 2013. A decrease in post-Olympic
demand for hotel rooms in London will bring 2013 rates down there.
Meanwhile, increased interest in 3-crown properties is expected
throughout France as brands invest in upgrading those offerings.
- CWT is also forecasting slight
gains in car rental rates, with an increase of 1.2 percent in 2013.
Recent consolidation in the EMEA marketplace, combined with aggressive
growth plans of traditionally low-cost providers, is creating increased
competition that will hold down prices.
- High-speed rail rates will likely
increase 4.3 percent during 2013 as this mode of transportation
continues to offer a competitive alternative to air travel in key
markets. Notably, increases of up to 9 percent are expected in
premium-class cabins, where corporate travelers typically ride to
access free wireless internet and other amenities.
- Meetings & events spending
will increase less than in other regions, with 1 percent increases
expected in costs per attendee per day. As a result, there will be less
pressure on EMEA-based organizations to reduce group sizes to offset
higher prices, which will produce slight increases of about 3 percent.
Further details on the
EMEA
forecast commented by a CWT Solutions Group expert.
Please click
here to view CWT’s 2013 Travel Price Forecast in
its entirety.
Forecast methodology
CWT’s global 2013 price projections were formed from the combination of
a.) a statistical model that evaluates historical price behavior and
forecasts future price references; b.) the market-specific expertise
and travel industry knowledge of CWT personnel worldwide; and c.)
macro-economic information sourced from IHS Global Insight, the
International Monetary Fund Research Department, and the United
Nations. All monetary references are in U.S. dollars.
About Carlson Wagonlit Travel
CWT is a global leader specialized in managing business travel and
meetings and events. CWT serves companies, government institutions and
non-governmental organizations of all sizes in more than 150 countries
and territories. By leveraging both the expertise of its people and
leading-edge technology, CWT helps clients derive the greatest value
from their travel program in terms of savings, service, security and
sustainability. The company is also committed to providing
best-in-class service and assistance to travelers. CWT services and
solutions comprise Traveler & Transaction Services, Program
Optimization, Safety & Security, Meetings & Events and Energy
Services. In 2011, sales volume for wholly owned operations and joint
ventures totaled US$28.0 billion. For more information about CWT,
please visit our global website at
www.carlsonwagonlit.com
Follow us on Twitter @CarlsonWagonlit and @CWTNorthAmerica.