The American Express Global Business Travel Forecast 2018 shows moderate price increases are expected across air, hotel and ground transportation, with demand being driven by a steadily improving global economy and growing confidence among the community.
Amex GBT says demand for business travel started the road to recovery last year and is expected to continue growing over the next 12 months. Notable gains are predicted in Europe and Asia, with China and India’s economy leading the way.
However, the report foresees only marginal gains in prices as suppliers rapidly increase capacity to meet demand.
Despite the recovering economy, Amex GBT says businesses are still exercising caution in the face of geopolitical instability and new policies in certain markets.
Strong demand is expected to drive airfare up across all regions, but overcapacity on certain routes, the expansion of low-cost carriers and low oil prices will keep rates from increasing too much. In the UK, short-haul economy is expected to go up by .75 per cent, while long-haul business is set for even less of a rise at .25 per cent. Meanwhile, the US is predicted to have one of the biggest price increases, with short-haul economy going up by 1.4 per cent and long-haul business up 4.9 per cent.
Hotel performance is expected to improve globally, and rates are predicted for a moderate increase. However, total costs will go up as ancillary fees and stricter cancellation policies are applied to boost hotel profitability. Here in the UK, buyers can expect a 2.5 per cent increase in rates. The biggest increase in the world is expected in Argentina, where Amex GBT predicts an 18 per cent rise.
The rental car industry has suffered from flat or negative growth in recent years, but Amex GBT predicts rates to increase in 2018 as companies improve their fleet management. However, competition among suppliers will continue to be driven by ancillary services and fees. Canada may see the biggest increase at 2.3 per cent, while the rise could be negligible in the EMEA region at 1 per cent or less across the board.
View the full forecast at amexglobalbusinesstravel.com/the-atlas/global-business-travel-forecast-2018