According to the latest GBTA-CWT forecasts, price increases will continue in 2020 in the Business Travel market.
« Companies must no longer take 2019 prices as a reference, prices will not return to this level » notes the latest Global Business Travel Forecast.
The post-pandemic boom in leisure travel and the recovery of the Business Travel market have weighed on prices. At the same time, suppliers have tried to limit price increases due to oil prices, inflation and rising labor costs. Prices will, however, be more linked in 2025 to external factors such as economic growth by zone, geopolitical tensions or oil prices.
The report notes that after a good recovery of SMEs in the Business Travel market, large companies are back.
The average price of plane tickets is the highest in Europe while North America holds the prize for premium tickets
In terms of airline tickets in Europe, the average price of $785 was the highest among all areas. Prices increased by 1.8% in 2023 and the increase is expected to reach 1.5% in 2024 and 1.4% in 2025. Inflation will continue to weigh on prices in Europe. It is in North America that the price of premium tickets is the highest, around $5,847, undoubtedly due to the good health of the American economy. The lack of aircraft deliveries following Boeing’s problems will weigh on supply and therefore on prices.
Airlines will receive 19% fewer planes by the end of 2024 than expected. The price of aircraft rentals has therefore increased, with airlines spending around 30% more on rentals than before the pandemic, which tends to increase prices.
« The sector may have shown resilience in the face of inflation, high interest rates and slowing GDP growth, but it continues to face headwinds that impact costs. The two most important factors are fuel and labor. And recruitment challenges are being reported across the aviation value chain, from ground handlers and airline staff to pilots and air traffic controllers. » notes the report. Tensions in Ukraine and the Middle East are also weighing on the market. However, there is less online supply than demand, which creates an inflationary dynamic,” notes the report.
Moderate increase of 1.9% in hotel rooms in Europe in 2025
Regarding hotels, the average room price increased by 3.9% in 2023 to reach $158. Prices have normalized after a 30% increase in 2022 and are expected to continue to stabilize. “ Hotel chains are now better prepared to accept lower occupancy, limit availability and expect higher rates. This increases revenue and reduces costs because fewer housekeeping staff are needed. Many providers have advanced yield management systems when it comes to setting dynamic room rates » the report states. Travel managers must know this in order to negotiate better. In Europe the average room price reached $157 in 2023, an increase of 6.8%. Growth should be more modest in 2024 and 2025, around 1.9%.
SOURCE : Business Travel.
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