After posting sharp rises in 2019, prices in the global travel industry are likely to slow in 2020, with flights rising a modest 1.2 per cent, hotels rising only 1.3 per cent, and rental car rates up 1 per cent (in USD terms), according to the sixth annual Global Travel Forecast, published by CWT and GBTA. While the global economy is doing well overall – and expected to grow a solid 3.6 per cent in 2020 – a raft of uncertainties are set to put a damper on pricing.
“The risks and ambiguity have increased over the past few months – not least the threat of escalating trade wars, the impact of Brexit, possible oil supply shocks, and the growing likelihood of recession,” said Kurt Ekert, CWT’s President and CEO. “This forecast will help travel buyers make the right decisions in an increasingly challenging environment.”
India’s strong economic growth is fueling a greater demand for business travel and driving up prices. Airfares are forecast to increase 5 per cent (in local currency terms; 0% in USD terms), while hotel rates and ground transport prices are expected to climb 6.8 per cent (1.8 per cent in USD terms) and 4.5 per cent (-0.5 per cent in USD terms), respectively.
“Earlier this year we saw a spike in airfares after Jet Airways ceased its operations in April, so we’re already at a high base in 2019,” said Vishal Sinha, CEO, India, CWT. “With other airlines adding capacity to fill the vacuum, fares have begun to normalize and we expect that to continue next year. However, if the rupee weakens against the dollar, Indian carriers could be faced with bigger fuel bills and we might see that being passed on to travelers.”
“Hotel rates are also expected to rise, as the demand for rooms outpaces supply, especially in secondary cities like Chandigarh, Jaipur and Ahmedabad. At the same time, the commercialization of mid-tier properties by players like Oyo are also pushing prices upwards.”
“Technological advancements and an increasingly volatile economic and political landscape across the globe have changed the way today’s travel buyers need to do their jobs,” said Scott Solombrino, GBTA COO and Executive Director. “This annual forecast provides insights into the key drivers forcing these shifting priorities and gives a road map for travel buyers looking to plan their 2020 travel programs.”
