2019 looks set to see across-the-board rate hikes
Price increases of 3.7% for the hotel sector and 2.6% for the year, due to global economic growth and higher oil prices, are among the global forecasts for 2019 included in the fifth annual Global Travel Forecast report released by the Global Business Travel Association (GBTA);
Global forecasts for 2019 included in the fifth annual Global Travel Forecast report, published by the Global Business Travel Association (GBTA) and CWT.
The percentages for Spain are even higher, with increases of 8.5% for hotel prices and 6.7% for airfares.
AÉREO
The aviation sector will be affected by the introduction of ultra-long-haul flights and by the growing competition from low-cost airlines, which are not only increasing the number of flights, but also the number of flights that will be operated by low-cost airlines;
The introduction of ultra-long-haul flights and the increasing competition from low-cost carriers, which are not only multiplying but also fighting for long-haul routes, as well as airlines' interest in taking advantage of new distribution capacity (NDC).
The likely rise in airfares will be driven by higher oil prices, competitive pressures from pilot shortages, potential trade wars and increased fare segmentation to improve yield.
• In Spain it is expected that the increase in airfares will be 6.7%, well above the global rate (2.6%) and a couple of points above that expected for Western European countries as a whole (4.8%). The biggest increases will be in economy class on intercontinental flights (7.9%) and business class on domestic flights (6.9%).
• In the area of Europe, Middle East and África, the likely increase in the price of air transport is concentrated in Western Europe (4.8 %), with particularly steep rises in France (6.9 %), Germany (7.3 %) and Norway (11.5 %). Eastern Europe and the countries of the Middle East and Africa, however, experienced price declines of 2.3 % and 2 %, respectively.
• In Latin America a price decline of 2 % is expected for 2019, with exceptions such as México and Colombia, with slight increases of 0.1 % and 1.2 % respectively, and Chile, where prices could rise by up to 7.5 %.In North America, prices will increase by a modest 1.8%. In the United States, airlines are readjusting to improve the most in-demand destinations as trade relations with key allies and adversaries change. U.S. aviation market capacity will shrink due to increased fare fragmentation, with fewer seats on premium and economy fares, as airlines try to improve their margins.
• In Asia Pacífico a price increase of 3.2% is expected for 2019. Chinese demand will remain high, and by 2020 the country is forecast to become the world's largest air freight market, with prices forecast to rise by 3.9 % as early as 2019. But China will not be alone. Most countries in the region will experience price increases, especially in New Zealand (7.5%) and India (7.3%), which could succeed China as the world's largest air freight market by 2025. The exception to this situation of rising prices is Japan, where prices are expected to fall by 3.9% due to increased capacity in the country for the 2020 Olympic Games.
ACCOMMODATION
The hotel outlook for 2019 isán driven by the overall increase in air travel, which will fuel demand for accommodations. Technology will also play an important role. Hotels are introducing advances aimed at personalizing the guest experience. On the other hand, the widespread use of mobile phones is forcing travel managers to offer their travelers applications that allow for greater autonomy in booking policies.
Mergers and increasing competition between luxury and mid-range accommodations, due to the increased interest of younger travelers in boutique hotels, will also be high on the industry's agenda.
• In Spain, the country that replaces the United States as the second most popular destination in the world according to the United Nations World Tourism Organization, hotel prices are expected to increase by 8.5%. This is much higher than the global rate (3.7%) and that of Western Europe (5.6%). This increase will be somewhat higher in mid-range hotels (8.6%) than in high-end hotels (8.4%).In Western Europe, and following in the footsteps of the prices in the aé reos, it is expected that hotel rates will increase in the second half of the year; hotel rates are expected to increase by 5.6%, while they are forecast to decrease in Eastern Europe (1.9%) and in the Middle Eastern and African countries (1.5%). Again, Norway tops the list with a rise of 11.8 %, followed by Spain with the aforementioned 8.5 %, Finland with 7.1 %, and France and Germany with 6.8 %.
• In Latin America hotel prices are expected to fall by 1.3%, with declines in Argentina (3.5%), Venezuela (3.4%), Brazil (1.9%) and Colombia (0.7%). However, countries such as Chile, Peru and Mexico are expected to register increases of 6.4%, 2.1% and 0.6%, respectively.
• In North America, hotel prices are expected to rise 5% in Canada and 2.7% in the United States.
• In Asia Pacific hotel prices are likely to rise by 5.1% on average, with large discrepancies between countries in the area. Thus, they are expected to fall by 3.2% in Japan, but to rise by an impressive 11.8% in New Zealand. In Australia, hotel availability is expected to increase over the next two years, with a 3.4% increase in total supply each year. In Indonesia, Swiss-Belhotel International plans to expand its budget brand, Zest Hotels, by tripling its number of properties in three years. Singapore, meanwhile, appears to be focusing on technology with a resulting increase in smart hotels. Finally, optimism is high in Thailand after a turbulent political period.
LAND TRANSPORT
Next year, only North America is expected to see an increase in land transport prices, with a modest 0.6%, while the rest of the regions are expected to remain stable. However, by the fourth quarter of 2019, we will see a concerted effort by rental companies to raise prices.
In 2019, we also expect a growing traveler preference for ride-hailing apps from collaborative economy companies, and a waning interest in high-speed rail, due to high network costs and poor delivery system technology.
Mobile mobility will continue to increase. On-demand, shared, electric and connected cars will become increasingly popular. In fact, connected car technology has the potential to change the automotive industry.
• In Spain it is expected that the price of ground transportation will rise by 4.8%, compared to a zero increase for both the global and Western European sectors.
• In Europe, the Middle East and Africa rates will remain stable overall. Norway will lead the way with a 10% increase. Meanwhile, countries such as Finland, France, Germany, Italy and Spain itself could see increases of more than 4%, while Denmark and the United Kingdom will remain at 3% and 2% respectively. On the negative side, Sweden appears with a drastic price decline (13.9%) and Belgium with a moderate one (0.9%).In Latin America, prices will also remain stable in general, with strong declines in Argentina (9.7%) and Brazil (5.4%) and very modest in Mexico (0.3%). Chilean prices will rise by 3.1%.
• In North America, prices in Canada are expected to rise by 3.6% in 2019, although the region will only experience an overall increase of 0.6%. In the U.S., Audi's mobile car rental service, Silvercar, is continuing its aggressive expansion and offering a no-wait, no-paperwork, no-hassle vehicle rental.
• In Asia Pacific, rates will remain stable overall, with marked increases in New Zealand (4%), India (2.7%) and Australia (2.4%). In China, the giant Didi Chuxing is betting on autonomous driving, while Uber has sold its Southeast Asian business to Singapore-based Grab, and Indonesia's Go-Jek has decided to expand into Vietnam, Thailand, the Philippines and Singapore.