Advito forecasts travel price increases for 2014

Growth in demand moderate, companies and suppliers remain cautious

September 25, 2013
by PurchasingB2B Staff

ATLANTA—Business travel demand will gain momentum in 2014, in line with projected global economic recovery, according to travel consultancy Advito’s annual Industry Forecast.

How significantly business will step up their travel is unclear after slower than expected trip growth in 2013. Overall price increases in the air, hotel and car sectors should be in line with inflation, according to the forecast. Travel buyers may even find attractive negotiating opportunities, especially on travel across the Atlantic and to Asia Pacific.

Advito publishes its annual Industry Forecast to give travel and procurement managers a benchmark range of projected prices so they can prepare for supplier negotiations and budgeting. The forecast includes supply, demand and pricing trends for air, hotel, meetings, car rental and rail for all of the major regions in the world. This year‘s forecast also discusses U.S. airline mergers and the growth of hybrid carriers, among other topics.

Among Advito’s findings for next year’s air trends: while airlines in the U.S. and Europe are keeping a firm grip on capacity, soft demand will likely prevent significant fare hikes. Latin America will tally some of the sharpest fare increases, up by 2-3 percent. Over-capacity from the three Gulf carriers could drive down prices on many routes between Africa, Europe, and Asia Pacific. And in Asia, travellers may find some of the best deals in business class.

Among the findings in the hotel category: hotel companies will look to raise corporate rates by 4-6 percent for 2014 but likely will achieve only half that. Latin American and Africa will see the strongest rates of demand growth. Buyers can expect double-digit rate increases in primary international cities such as New York and Hong Kong, and in under-supplied emerging destinations like Sao Paulo and Luanda. In contrast, there will be strong negotiating opportunities in smaller cities.

Meetings demand remains strong, growing at a faster pace than transient travel. Advito anticipates moderate meeting price increases in 2014. And in the car rental category, intense competition between the three major suppliers should continue to keep corporate car rental rates in check. Rate increases in 2014 shouldn’t rise above 4 percent.

The Advito 2014 Industry Forecast is available at (in the Resource Center section under “White Papers”). Advito provides travel-management advisory, procurement and outsourcing services that guide clients through a complex travel environment.