Although global air-travel prices are showing signs they will remain flat in 2016, six hot spots have been identified where increased business-travel demand could significantly drive up fares. India, China, Colombia, Mexico, Singapore and Australia are expected to top the list of airfare increases next year, according to the 2016 Global Travel Price Outlook, courtesy of the Global Business Travel Association Foundation and Carlson Wagonlit Travel.
"The top-line pricing outlook for air, hotel and ground in 2016 is surprisingly stable," notes GBTA Foundation vice president of research Joseph Bates. "But when you dig deeper, the data reveal these global hot spots."
In the report's projection for air-travel prices, the U.S. is expected to see an uptick of just 0.5 percent, while air prices in Canada are expected to dive by 5 percent. Europe, the Middle East and Africa should see just a 0.4 percent increase. While the increases for Asia Pacific (1.2 percent) and Latin America (0.8 percent) are projected to be relatively small, demand in the hot spots should drive prices notably higher: Colombia, Mexico and Singapore are expected to see 3 percent increases; China, a 2.8 percent rise; Australia, a 2.7 percent increase, and India, a 2.6 percent jump. A seventh country, Venezuela, could see prices jump by 6.3 percent, driven by high inflation, the drop in oil prices and their currency being fixed to the U.S. dollar.
Hotel prices are expected to increase across the board in 2016, led by North America, where high demand, particularly in major U.S. cities, could result in a 4.3 percent rate increase. A 3.7 percent projected increase in Latin America is due to high inflation in some countries, notably Venezuela and Brazil. The Asia Pacific is projected to see an increase of 3 percent, led by Singapore, Japan and Australia, while the EMEA region will likely see a more modest increase of 1.8 percent. That said, due to exchange rates against the U.S. dollar, many European countries are likely to see higher increases in their local currency.
In terms of meetings and events, modest increases are being projected worldwide for cost per attendee, per day, and group size, with the exception of the Asia Pacific region. There, led by strong demand in India and China, the average cost per attendee is expected to jump by 5 percent and group sizes could leap by 11 percent. In North America, rising F&B costs could drive a 4.5 percent increase in cost per attendee, per day.
The full report may be accessed for free here