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Airline prices are set to be nearly flat on a global basis

Reason due to significantly lower energy prices, steady increases in capacity and stable demand. Regionally, the report projects.

Tuesday, July 21, 2015
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  • Asia Pacific and Latin America - small price increases (1.2 percent and 0.8 percent respectively). See below for six hot spots in these regions.
  • In Europe, Middle East and Africa, prices will see a small increase (0.4 percent).
  • In North America, (0.5 percent) — with the U.S. slightly up (0.5 percent) and Canada sharply down (-5 percent).
  • Yet, global and regional numbers reveal only part of the picture. There are six countries that are seeing projected price increases as a result of higher demand, including:
  • Colombia - by 3 percent, caused by a rapidly growing middle class and relatively stable economy, which are driving demand while capacity has grown at a modest rate.
  • Mexico - by 3 percent, driven by strong domestic and international demand.
  • Singapore - by 3 percent, driven by lower energy prices and less restrictive monetary policy that will fuel demand.
  • India - by 2.6 percent, driven by spiking business and consumer confidence.
  • China – by 2.8 percent, bolstered by domestic demand and strong demand despite slowing economic growth and business travel volume.
  • Australia - by 2.7 percent, as improving business conditions will boost domestic air travel.

A seventh nation – Venezuela – is projected to see a 6.3 percent increase, caused by high inflation, the drop in oil prices and a currency fixed to the US dollar.
Hotel

  • Globally, 2016 will show an increase in hotel prices because demand is overtaking supply in every major global region:
  • Asia Pacific will see hotel prices rise by 3 percent — led by Singapore, Japan and Australia.
  • In Europe, Middle East and Africa, hotel prices will see a moderate increase at 1.8 percent, although many European countries will experience price increases in local currency due to exchange rates with the U.S. dollar. Prices in Russia will rise significantly due to the impacts of the drop in oil prices and sanctions on its economy.
  • In Latin America, prices will rise— 3.7 percent — due to high inflation in some nations, particularly Venezuela and Brazil.
  • In North America, high demand will increase rates by 4.3 percent, driven by economic activity in the Bay Area,

Los Angeles and other major U.S. cities.

Ground
Car rental pricing has been under pressure for a number of years. Demand isn’t rising sharply enough, and fleets are not being managed tightly enough, leading to stagnant rates globally and regionally. The most interesting trend we’re seeing globally revolves around the sharing economy. While we do not predict a significant impact on traditional car rentals globally, there may be an impact to rental car companies’ car share and sedan/black car segments.

Meetings & Events
Across the globe, only modest increases are expected in cost per attendee per day and group size, with the exception of Asia Pacific which will see a 5 percent increase in cost and an 11 percent increase in group size. Strong demand from China and India is the major driver for the region’s increasing cost and group sizes. North America will also see a 4.5 percent cost per attendee per day increase, with food and beverage pressures continuing to be a significant driver of costs.

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