DJ CWT: Global travel pricing set to slow down in 2020; flights to rise 1.2%, hotels 1.3%
CWT
CWT: Global travel pricing set to slow down in 2020; flights to rise 1.2%,
hotels 1.3%
31-Jul-2019 / 11:24 GMT/BST
Global travel pricing set to slow down in 2020; flights to rise 1.2%, hotels
1.3%
Minneapolis / Alexandria, 31 July 2019: After posting sharp rises in 2019,
prices in the global travel industry are likely to slow in 2020, with
flights rising a modest 1.2%, hotels rising only 1.3%, and rental car rates
up 1%, according to the sixth annual Global Travel Forecast, published today
by CWT and GBTA. While the global economy is doing well overall - and
expected to grow a solid 3.6% in 2020 - a raft of uncertainties are set to
put a damper on pricing.
"The risks and ambiguity have increased over the past few months - not least
the threat of escalating trade wars, the impact of Brexit, possible oil
supply shocks, and the growing likelihood of recession," said Kurt Ekert,
CWT's President and CEO. "This forecast will help travel buyers make the
right decisions in an increasingly challenging environment."
Released today by the Global Business Travel Association, the voice of the
global business travel industry, and CWT, the B2B4E travel management
platform, the 2020 Global Travel Forecast uses data generated by CWT
Solutions Group, to give an early look at the trends and developments that
will shape the business travel industry in the year ahead.
"Technological advancements and an increasingly volatile economic and
political landscape across the globe have changed the way today's travel
buyers need to do their jobs," said Scott Solombrino, GBTA COO and Executive
Director. "This annual forecast provides insights into the key drivers
forcing these shifting priorities and gives a road map for travel buyers
looking to plan their 2020 travel programs."
Asia Pacific
Air: 1.3% Hotel: 1.3% Ground: 0.5%
Asia's expansion has slowed down due to worsening US-China relations,
tighter global financial conditions, and natural disasters. But the region
remains the most dynamic, with steady GDP growth, benign inflation, and a
sense of optimism.
? Air: In Asia Pacific, the shutdown of India-based Jet Airways'
operations in April created a gap in the market for some key routes, and
the reduced competition has meant higher airfares - but with other
airlines adding capacity to fill the vacuum, fares have begun to
normalize.
? Hotel: Asia's hospitality industry is booming with hotel investment
volumes predicted to grow 15% year-on-year. Japan will host the Rugby
World Cup later this year, and the Olympic and Paralympic Games in 2020,
which will boost visitor numbers to the region. The Japanese hotel market
is seeing a sharp increase in supply to accommodate the anticipated surge
in visitors to the country during these events.
? Ground: In China, steady demand and increased competition will hurt car
suppliers. Across Asia Pacific, ride-sharing is booming, with many
companies allowing their employees to use these services for business
travel. Providers like Didi Chuxing, Grab, Go-Jek and Ola are pursuing
aggressive expansion plans, while also taking steps to put more stringent
safety measures in place.
Europe, Middle East & Africa
*Eastern Europe: Air: -0.2% Hotel: 0.7% Ground: 1.5%*
*Western Europe: Air: 0.5% Hotel: 0.7% Ground: 0.5%*
*Middle East & Africa: Air: 2.2% Hotel: 2.5% Ground: 0.5%*
The International Monetary Fund (IMF) expects steady growth, ranging from
0.3% in the Middle East to 1.6% in Europe, and 3.6% in Africa. Across
Europe, labor unrest, climate change protests, global trade wars, rising oil
prices and regional terrorism all have the potential to cause a slowdown.
? Air: Istanbul's new airport, one of the largest in the region, will
likely change flows between Europe and Asia, providing an alternative
stopover point for flights to China and Eastern Asia.
? Hotel: Denmark and Egypt are both countries to watch, with hotel prices
in Denmark expected to fall next year. On the other hand, Egypt's rates
are on the up - projected to rise by 4.7% - as its economy settles down
after a period of unrest.
? Ground: Eastern Europe's franchise model for rental car businesses will
see slightly higher growth of 1.5%, due to supply and demand in the
region. Rail prices still vary greatly across EMEA due to inconsistent
regulation.
Latin America
Air: -1.6% Hotel: -0.4% Ground: 1%
Economic activity in Latin America continues to grow - albeit slower than
anticipated - and is expected to rise 2.5% in 2020. A volatile political and
economic situation in some of the largest economies like Argentina, Mexico
and Brazil will hurt prospects.
? Air: Given the long distances, a growing middle class, and low market
penetration of air travel, there are many opportunities, and airlines are
making the best of them. Since 2017, several new carriers have entered the
market and low-cost carriers have gained significant share in Brazil,
Mexico and Colombia.
? Hotel: Following a steady decline in new hotels from a 2015-2016 peak,
things may be picking up, with Mexico leading the way. More than 10 new
corporate chain hotels opened in the region in the first quarter of 2019
with growth set to continue throughout 2020. Properties in Mexico and
across Latin America are likely to continue to cut prices.
? Ground: A slight increase for rental cars is driven by growing demand in
Brazil, the region's biggest economy. Rental car companies report a
cultural shift towards sharing cars rather than owning them, and growth in
tourism is also boosting the industry.
North America
Air: 2.3% Hotel: 2.3% Ground: 1%
While the US economy is thriving, there is growing uncertainty, due to
tariffs and trade wars. US GDP growth is set to slow to 2.1% in 2019, and
slow further in 2020 and 2021, to 2% and 1.8%, respectively.
? Air: Flight prices are expected to rise, reflecting the strong economies
of the US and Canada. Most airlines are looking to ancillary fees as a way
to stay competitive, so costs of services like Wi-Fi and lounge access may
be up for negotiation for corporate travelers.
? Hotel: The hotel industry has seen slow, but steady growth. A gradual
slowing will help rates return to normal, correcting the high prices seen
in some of the major cities. Technology-focused areas - like San
Francisco, San Jose, Seattle and Vancouver - are still seeing growth.
However, demand in these cities has been high for so long that prices have
risen too far - and business travelers are staying further out in
response.
? Ground: Due to the nature of long-term contracts, we are unlikely to see
any upward trends in pricing until 2021 or 2022. Traveler preferences are
dictating a change in car preferences, shifting away from traditional
sedans in favor of more versatile SUVs and trucks.
For more detailed information, download the 2020 Global Travel Forecast [1]
now.
About the 2020 Forecast [2]
The projections in the 2020 Global Travel Price Forecast are based on:
? A statistical model developed by GBTA with market and economic research
firm, Rockport Analytics, that evaluates historical price behavior and
forecasts future prices in the air, hotel and ground categories.
? The market-specific expertise and travel industry knowledge of CWT and
CWT Solutions Group personnel worldwide.
? Information sourced from Moody's Analytics, the International Monetary
Fund Research Department, the United Nations and other leading
organizations.
Projections are based on transaction data from CWT's global client
portfolio, including anonymized client travel patterns, over the past ten
years. Key macroeconomic and per-country indicators, such as current and
expected GDP growth, the consumer price index, unemployment rates and crude
oil prices, were used in the statistical model, as well as key supply-side
drivers sourced from OAG and STR Global. All air statistics represent point
of origin and include all trip types.
More information
Learn more about the Global Travel Forecast and the price projects and
trends that lie ahead in 2020 during an education session [3] at GBTA
Convention 2019 on Monday, August 5 at 9:30 am CST in room S504ab.
A webinar will also be taking place for a deeper dive into the research
findings featuring experts from CWT, Rockport Analytics and GBTA. This
session will take place on Thursday, September 19 at 9:00 am CST. Register
today [4].
About the Global Business Travel Association
The Global Business Travel Association (GBTA) is the world's premier
business travel and meetings trade organization headquartered in the
Washington, D.C. area with operations on six continents. GBTA's 10,000-plus
members manage more than $345 billion of global business travel and meetings
expenditures annually. GBTA delivers world-class education, events,
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July 31, 2019 06:25 ET (10:25 GMT)
research, advocacy and media to a growing global network of more than 28,000
travel professionals and 125,000 active contacts. To learn how business
travel drives lasting business growth, visit www.gbta.org [5].
About CWT [6]
CWT is a Business-to-Business-for-Employees (B2B4E) travel management
platform. Companies and governments rely on us to keep their people
connected - anywhere, anytime, anyhow - and across six continents, we
provide their employees with innovative technology and an efficient, safe
and secure travel experience. Every single day, we look after enough
travelers to fill more than 100,000 hotel rooms, while our meetings and
events division handles more than 100 events every 24 hours.
Follow us on Facebook [7], LinkedIn [8], and Twitter [9].
Media contact:
Taylor Aaron
Senior Manager, Global Communications
T: +1 612 244 9420
taaron@mycwt.com
Colleen Gallagher
Vice President, Communications, GBTA
T: +1 315 447 2331
cgallagher@gbta.org
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