BANGKOK, 21 July 2017: Air fares in the Asia Pacific are forecast to rise 2.8% in 2018 with domestic demand increasing, particularly in China and India according to the 4th annual Global Travel Forecast.
As many of the region’s economies strengthen, the downside is the ability of airports to keep up with demand.
Released Wednesday by Carlson Wagonlit Travel and GBTA Foundation, the research arm of the Global Business Travel Association, the 4th annual 2018 Global Travel Forecast shows global airfares could rise 3.5% in 2018.
Global hotel prices are expected to be 3.7% higher and ground transportation, such as taxis, trains and buses, are expected to rise by a marginal 0.6% – significantly less than the 3% inflation forecast for 2018.
Overall travel costs should rise sharply in the coming year, reaching nearly 4% increases in some sectors.
“The higher pricing is a reflection of the stronger economy and growing demand,” said Carlson Wagonlit Travel president and CEO Kurt Ekert. “The global numbers from this forecast should be considered strong leading indicators of what 2018 will mean for global businesses, as we anticipate higher spending.”
Both Beijing Capital and Hong Kong Airport have reached terminal capacity, while Mumbai and New Delhi are expected to reach traffic capacity by 2018 and 2021.
While there is no short-term solution to improve the region’s air travel congestion broadly by 2018, Singapore Changi Airport recently opened its fourth terminal relieving pressure with greater capacity and flight frequency.
In Indonesia, Jakarta’s Soekarno-Hatta Airport recently completed phase one of its 25 million-passenger-per-year terminal. Beijing New Airport is slated to open in 2019.
The report suggests India will see the largest increases in fares in 2018, forecast to climb by 8.7%. Fares in Australia will increase 5.4%, China 2.6%, Hong Kong 1.9%, Indonesia 4.7%, Singapore 3.9%, Thailand 6.6% and Philippines 7.1%.
Two countries may see declines in fares; Japan -6.3% and Vietnam -6.3%.
Across Asia Pacific, hotel prices are likely to rise 3.5% – with a large discrepancy as Japanese prices are expected to fall 4.1%, but New Zealand is set to rise a full 9.8%. Strong economies means demand is increasing in the APAC region. Buyers should anticipate a more challenging discussion with newly merged hotel groups, especially in high-volume markets such as Bangkok, Beijing, Shanghai and Singapore.
Ground transportation pricing is expected to rise globally only 0.6% in 2018 (but 5.5% by 2022).
Sharing economy players such as Uber and Lyft are expected to continue double-digit growth upwards of 10% in 2018, before settling down into single-digit growth for 2019. Their growth is under threat by costly regulation and government bans.
Continued uncertainty in mining, and a cautious recovery in the oil and gas industry will result in flat rates for 2018 in Asia Pacific. Business continues to grow in China as most major car rental and sharing economy suppliers have a presence. Sharing economy suppliers Didi Chuxing in China, Ola in India and Grab in Southeast Asia have all achieved economies of scale that make them key competitors to more traditional car rentals firms and taxis.
About the 2018 Forecast
Forecast projections provided by CWT Solutions Group. Data analysis provided by Rockport Analytics.
Download the 2018 Global Travel Forecast: http://www3.gbta.org/l/5572/2017-07-13/574knd.
(Source: Carlson Wagonlit Travel)