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% (in USD terms), 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.”
India’s strong economic growth is fueling a greater demand for business travel and driving up prices. Airfares are forecast to increase 5% (in local currency terms; 0% in USD terms), while hotel rates and ground transport prices are expected to climb 6.8% (1.8% in USD terms) and 4.5% (-0.5% in USD terms), respectively.
“Earlier this year we saw a spike in airfares after Jet Airways ceased its operations in April, so we’re already at a high base in 2019,” said Vishal Sinha, CEO, India, CWT. “With other airlines adding capacity to fill the vacuum, fares have begun to normalize and we expect that to continue next year. However, if the rupee weakens against the dollar, Indian carriers could be faced with bigger fuel bills and we might see that being passed on to travelers.”
“Hotel rates are also expected to rise, as the demand for rooms outpaces supply, especially in secondary cities like Chandigarh, Jaipur and Ahmedabad. At the same time, the commercialization of mid-tier properties by players like Oyo are also pushing prices upwards.”
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.”
