Six key risks for the global business travel market

Emerging market performance, financial market turbulence, geopolitical risks, uncertainty surrounding Brexit, potential fluctuation in U.S. interest rates and crude oil prices are the six variables that may affect business travel prices in 2017, according to GBTA's latest study.

These findings come from the 2017 Global Travel Price Forecast, a study by the GBTA Foundation, the training and research arm of the Global Business Travel Association (GBTA), and travel management company Carlson Wagonlit Travel (CWT).

This third annual report provides global, regional and country-by-country projections for air, hotel, ground transportation, meetings and events pricing in 2017. Overall, no major fluctuations are expected for the coming year.

According to Jeanne Liu, vice president of Studies at the GBTA Foundation, “the forecast shows úThe forecast shows only marginal increases or flat travel prices, but in 2017 the key to building successful travel programs will be to keep a close eye on the changing global landscape and know how to react.



AÉREO

Aéprices are expected to increase only slightly (2.5%) in 2017, while rates may drop below 2015 levels in some markets due to crude oil prices remaining low.

However, charges for ancillary services will have an increasing impact: they rose to make up 7.8% of overall airline revenues in 2015 from 6.7% in 2014 and this trend is expected to continue.

Asia Pacific
While the region is expected to experience a 1.1 % price drop, it is expected to remain stable in 2017 thanks to low oil prices. However, Japan and Singapore are likely to experience a significant impact on oil prices due to their projected currency exchange rates.

Europe, the Middle East and África
These regions will see mixed situations. In Eastern Europe, prices are expected to increase by 4 %, partly due to limited competition. In Western Europe they will increase by 0.5 %, and in Africa and the Middle East by 2 %.

America
In Latin America and the Caribbean, prices are expected to fall by 1.9 %, while in the north of the continent prices could rise by 3.7 %. Airlines will reinvest part of the profits from lower crude oil prices in the purchase of new aircraft.



ACCOMMODATION

The mega-mergers are making headlines, but their impact on prices is not likely to be felt until 2018. Traditional hotels remain an attractive alternative for business travelers despite the options offered by the collaborative economy.

Asia Pacific
Prices will see a slight drop of 0.6%.

Europe, Middle East and Africa
Again, there are differences depending on the areas, as geopolitical incidents have an impact on hotel rates. In addition, low gas and crude oil prices have caused corporate travel in the sector to decline, mainly in the Middle East, Africa and Russia. Fares are expected to fall by 2.4% in Eastern Europe. In Western Europe, they will increase by 1.8%; and in the Middle East and Africa, they could decrease by around 0.5%.

America
In Latin America and the Caribbean, the expected drop is 0.9%. In North America it will increase by 4% in 2017, but the difference between the two coasts will be notable. West Coast cities —such as Seattle, Los Ángeles, San José or Vancouver— will see substantial increases of one or two daysíges, due to the high-tech boomía and a shortage of hotel rooms. Meanwhile, the East Coast, as well as the oil-producing region of Canada, will face low growth or even decline due to an oversupply of hotel rooms.




LAND TRANSPORTATION

A climate of intense competition will dictate that prices in the land transportation sector remain flat globally. In Asia Pacific, prices are expected to increase by 0.8%, while in Europe, the Middle East and Africa they are expected to remain broadly unchanged, with a slight 0.1% decline expected in Western Europe. For Latin America the forecast is for a 0.5 % increase and in the north of the continent unchanged from 2016.




MEETINGS AND EVENTS

Moderate increases in the daily cost per attendee are expected in Asia Pacific and North America. In Europe there will be no substantial variations and in Latin America they will decrease by 10%. Group size will grow marginally by around 3-6% in Asia Pacific, Europe and North America, while in Latin America it will remain unchanged.