Amex: Travel Costs to Rise in Emerging Markets
by Michael J. ShapiroOctober 18, 2012
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Robust increases in business travel pricing are on the horizon for some markets in Latin America, Asia and Eastern Europe, according to the Global Business Travel Forecast 2013, released Thursday by American Express Global Business Travel. At the same time, relatively flat pricing in most mature markets will result in modest overall increases predicted for next year. Airfares in North America are expected to rise by just 1 to 3 percent for business-class travel, while short-haul economy fares could climb by 2 to 4 percent. Amex predicts long-haul economy fares in North America to change by -1 to +2 percent. Upper-range hotel rates in the region could climb by as much as 4 to 9 percent, although possible increases vary significantly by market. In Latin America, buoyed by several strong economies, Amex foresees short-haul economy airfares to shoot up by 7 to 10 percent and long-haul fares to rise by 5 to 8 percent, with business-class fare increases to be slightly more modest (3 to 6 percent for short-haul fares and 4 to 7 percent for long-haul). Overall hotel rate gains in Latin America should be in the mid-single digits, notes the forecast; rate increases in Brazil and Argentina will be the highest.
In Europe, the Middle East and Africa, low single-digit airfare increases are expected to be the norm. Those locations hardest hit by the economic crisis could see price drops, however; for instance, long-haul economy fares in Spain could decrease by 5 to 8 percent, according to the forecast. Locations in the region expected to exhibit higher increases include Russia, where long-haul economy fares are forecast to grow by 5 to 7 percent, and Poland, where the same fare is predicted to rise by 3 to 5 percent. Very low increases are expected in hotel rates across most of Europe, while moderate growth is forecast for Russia, the Middle East and Africa.
Rates vary significantly by country in the Asia Pacific region. Amex expects to see the greatest increases in India, where airfares could shoot up by as much as 8 percent. In China, rates are forecast to remain flat or decrease, due to slowing construction and manufacturing as well as decreased investments from Europe. Hotel rates in the region are predicted to differ widely at the country and city levels. Beijing, for example, could see moderate growth based on demand beginning to exceed supply in that city.
The Global Business Travel Forecast 2013 is free for American Express Expert Insights subscribers, $495 for Amex Global Business Travel clients and $995 for everyone else. More information is available at http://amex.co/WskJMH.