Air fares, hotel rates and car rental costs are all set to continue rising throughout the rest of 2023 and in 2024 but the scale of increases is likely to be “more moderate”, according to CWT and GBTA’s 2024 Global Business Travel Forecast.
In its annual report released today, CWT notes that prices across all travel categories “skyrocketed” in 2022 and ended up “far surpassing” predictions made a year ago. The TMC said this was down to rising fuel costs, staff shortages and supply chain challenges, accompanied by “red hot demand” from both the leisure and corporate markets.
Patrick Andersen, CWT's CEO, said: “Looking forward, prices seem to be levelling off with much milder increases projected over the next 12 to 18 months. We could now be looking at the true new cost of travel.”
The global average ticket price for flights, which rose by a huge 72 per cent in 2022 to reach $749, is only expected to go up by 2.3 per cent this year to $766 and by another 1.8 per cent in 2024 to $780.
Air fares were even higher in the EMEA (Europe, Middle East and Africa) region at $855 in 2022. They are predicted to see another 2.9 per cent rise this year followed by a lower 2.2 per cent increase in 2024.
According to the forecast, air fares are expected to stabilise with “dampened” price increases, given inflation growth and very moderate increases in GDP this year.
Meanwhile, the average daily rate (ADR) for hotels, which went up by 29.8 per cent to $161 in 2022, is expected to rise by 4.3 per cent this year to $168, followed by a 3.6 per cent increase to $174 in 2024.
In EMEA the ADR rose to $164 in 2022 – a 28.1 per cent rise on the previous year. An increase of three per cent is forecast in both 2023 and 2024 for EMEA, taking the ADR to $169 and $174 respectively.
Richard Johnson, from CWT Solutions Group, added: “The percentage rises were phenomenal last year but the good news for the next 18 months is that we shouldn’t expect anything like that type of spike. We’re going to see prices rising but nothing like we saw in 2022.”
The prices of other business travel categories will also continue rising, with car rental rates set to go up by 6.7 per cent to $48 per day this year and then “cool” to just a 2.1 per cent increase ($49 per day) in 2024.
Regionally, EMEA saw car rental rates increase 10.9 per cent to $61 a day in 2022, although these prices hikes are not expected to continue this year, with a 3.3 per cent rise to $63 expected for 2023, followed by a 1.6 per cent increase to $64 per day in 2024.
Strong demand for meetings and events will also push up the average daily cost per attendee from $160 in 2022 to $169 this year and then $174 in 2024. The ADR for group bookings is also predicted to rise from the $294 in 2022 to $321 in 2024.
“We think it’s unlikely that hotels and other suppliers will have the same ability to increase rates as they did in 2022,” added Johnson.
“Booking early is very important – travel buyers need to plan, plan, plan for the medium and long-term. They need to be locking in inventory and bookings as early as possible.”
Johnson also stressed the importance of corporates being able to “consolidate and leverage” their business travel and meeting and events spending with their key suppliers to secure better prices.