Business travel demand drives up airfares

Increased demand for business travel is driving significant airfare increases in India, China, Colombia, Mexico, Singapore and Australia, despite global air travel prices displaying signs of being essentially flat in 2016.

This is according to the 2016 Global Travel Price Outlook conducted by the Global Business Travel Association and Carlson Wagonlit Travel. The report provides global, regional and country-by-country projections for air travel, hotel, ground transportation and meetings and events prices in 2016.

“Business travel is a leading indicator of global economic activity,” says Joseph Bates GBTA Foundation VP of research. “The top-line pricing outlook for air, hotel and ground in 2016 is surprisingly stable, but when you dig deeper, the data reveals global hot spots where demand is driving air travel price increases. For 2016, India, China, Colombia, Mexico, Singapore and Australia are projected to top the list.” CWT Solutions Group VP, Christophe Renard, says the outlook can help drive opportunities and cut costs to stretch travel budgets further. “The data provides a compelling picture of a dynamic business travel industry,” he says.

According to the report, Colombia, Mexico and Singapore are seeing a 3% projected increase in airfares as a result of the rapidly growing middle class and relatively stable economies, which are driving demand while capacity grows at a modest rate. India sees an increase of 2.8% as a result of spiking business and consumer confidence, while China’s 2.8% increase has been bolstered by domestic demand and strong demand despite slowing economic growth and business travel volumes. Lastly, Australia’s improving business conditions, which boost domestic air travel, have seen a 2.7% projected price increase in airfares as a result of higher demand.

A seventh nation – Venezuela – is projected to see a 6.3% increase, caused by high inflation, the drop in oil prices and a currency fixed to the US dollar.

Source: etnw