International event management agency, Carlson Wagonlit Travel (CWT), has released its 2013 Travel Price Forecast.
The report indicates prices in most areas of travel spend are expected to grow modestly around the globe next year with the most significant inflation expected throughout the Asia Pacific and Latin America regions.
CWT’s global 2013 price projections were formed from the combination of a) A statistical model that evaluates historical price behaviour and forecasts future price references; b) The market-specific expertise and travel industry knowledge of CWT personnel worldwide; and C) macro-economic information sourced from IHS Global Insight, the International Monetary Fund Research Department, and the United Nations.
“Price increases in 2013 will begin to level off in most regions throughout the world compared to what travel buyers experienced in 2012, as booming economies like Asia Pacific’s begin to normalise, and as uncertainty remains in Europe,” says Senior VP of Global Product Marketing and CWT Solutions Group, Nick Vournakis. “While slightly higher prices will be the reality again next year as demand for travel outpaces supply in most places, our forecast demonstrates there is still plenty travel buyers can do to watch costs and take care of travellers through other measures, including re-examining how they influence traveller behaviour.”
While Europe continues to face mounting economic uncertainty, most Middle Eastern and African economies are faring reasonably well, the report found. As such, the region overall will experience moderate travel price increases in 2013, although the report warns significant changes could occur at any point.
Other key points made in the report:
- Airfares will likely climb 2.5 per cent during 2013, as carriers have been diligent in implementing tight capacity controls that continue to yield high load factors despite economic concerns.
- Average daily hotel rates will likely increase 1.3 per cent during 2013. A decrease in post-Olympic demand for hotel rooms in London will bring 2013 rates down there. Meanwhile, increased interest in three-crown properties is expected throughout France as brands invest in upgrading those offerings.
- High-speed rail rates will likely increase 4.3 per cent during 2013 as this mode of transportation continues to offer a competitive alternative to air travel in key markets. Notably, increases of up to nine per cent are expected in premium-class cabins, where corporate travellers typically ride to access free wireless internet and other amenities.
- Meetings and events spending will increase less than in other regions, with one per cent increases expected in costs per attendee per day. As a result, there will be less pressure on EMEA-based organisations to reduce group sizes to offset higher prices, which will produce slight increases of about three per cent.
The forecast found the Asia Pacific (APAC) region has experienced strong economic growth over the past several years, which quickly drove prices upward. Growth in 2013 is expected to stabilise,which will likely lead to modest price increases, although specific resultsvary widely by country.
The Latin America (LATAM) region continues to experience overall economic growth, though significant disparities continue to exist that will create varied travel pricing by country next year. The newly formed LATAM Airlines, which is now the world’s second largest airline by market value, will embark on its first full year of operation in 2013, which may result in improved routes and frequencies to, from, and within the region.
While the economies of the United States and Canada are experiencing slow and steady improvement, there is no major growth expected for the foreseeable future, which will help contain travel price increases in 2013 for most categories of spend.
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