Carlson Wagonlit Travel (CWT) has put together a travel price forecast to help you make the best business travel savings possible.
Economic performance continues to vary greatly around the world, with some regions experiencing more growth than others.
Airline prices throughout the region are expected to increase only modestly in 2013. Across the region, Australian travellers are facing a government-imposed carbon tax, China is focusing on expanding its global footprint by offering services to more foreign markets, while in India fuel prices will continue to be heavily regulated.
Hotel prices will face modest price inflation throughout the Asia Pacific region. Singapore will experience price increases as business travel demand continues to be very strong. Due to the dramatic influx of new hotel construction in China and India 2013, travel buyers will find some price relief.
Due to a tighter fleet management by suppliers with available supply more closely aligned with demand, the car rental markets in Australia and New Zealand are expected to perform quite strongly in 2013.
Costs of meetings and events (M&E) will vary considerably by country, however the cost per attendee per day will generally increase 5-7%.
Europe, the Middle East and Africa (EMEA)
Generally, throughout Europe airline ticket prices will increase slightly in 2013. Strong business travel is still expected in Germany and the UK in 2013, as their economies are expected to do better than the region overall. Spain and Italy’s economic conditions remain a real concern and air travel prices are unlikely to rise.
The UK enjoyed strong hotel inflation throughout 2012 due to the Olympic Games, however reduced demand in 2013 will produce slightly negative pricing as suppliers work to fill rooms following a boost in supply for the Games. Russia is a market to watch in 2013 and beyond as it remains attractive to investors, hosting the Winter Olympic Games and FIFA World Cup in the next six years.
The Middle East, United Arab Emirates (UAE) and Saudi Arabia are also worth watching. The UAE has experienced decreased pricing over the past few years, however an increase in the number of Chinese leisure tourists to Dubai should improve the country’s outlook for 2013, although soft demand for business travel will keep prices down.
A flat to modest increase in the car rental market is expected for 2013. Recent consolidation in the marketplace and the aggressive growth plans of traditionally low-cost providers have created more competition among suppliers, which will help keep prices down for buyers.
M&E spending throughout EMEA will increase less than in other regions, with flat to 2% increases in average costs per attendee per day.
The strong economies of Brazil and Chile are expecting notable airline price increases in 2013. In contrast to this, the suffering economies of Argentina, Colombia, Mexico and Peru are expecting moderate decreases to slight growth that reveal the instability currently occurring in each country.
Brazil’s car rental market will continue to grow as major US-based suppliers expand operations into the country to meet increasing demand.
M&E spending is expected to increase in Latin America in 2013. Spending increases per attendee per day will be the highest in the world, at 9.8-12.2%.
The economies of Canada and the US continue to move slowly but steadily in a positive direction, with no expectations for major growth in the foreseeable future.
Airline prices for US-based carriers are expected to experience measured growth in 2013, with slightly weaker inflation anticipated for Canadian carriers.
Due to the slightly slower than expected growth of the US economy, hotel average daily room rates will continue to rise throughout 2013. However, the increases will remain below the 5% mark in both the US and Canada overall.
As the marketplace remains highly competitive with just a few suppliers vying for corporate business, car rental suppliers in the US will struggle to raise prices in 2013, with decreases of 2-3% expected.
M&E spending in North America will experience more measured growth in 2013 than in 2012 as slight increases in supply will force suppliers to hold back on price increases a bit more than experienced last year.
Consider alternative carriers. There can be substantial differences in average ticket price between legacy carriers and low-cost carriers or smaller airlines. By continuously monitoring average ticket prices, travel buyers will ensure their managed airline programme is yielding the best possible pricing and service.
Conclude negotiations as soon as possible. Many organisations conduct hotel negotiations in the late summer and early autumn, with the goal of coming to a final rate in December that can be uploaded to and available within the GDS beginning January 1 of the coming year. By doing this in 2012, some organisations missed out on securing negotiated rates with hotels, who withdrew their offers based on having secured plenty of other corporate business by that point in time. This could happen again in 2013, so buyers would be well advised to finalise negotiated rates with hotels as early as possible.
Consider new ideas. Car share options are worth considering in frequently travelled metropolitan markets where multiple employees may be able to participate. Also, organisations should take advantage of rail as an alternative to air on routes where both options exist and examine whether it could be a viable option for the programme based on travel patterns.
For a more detailed version of the report, visit www.carlsonwagonlit.co.uk