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Report: Hotel and Air Prices Expected to Rise in 2019

ALEXANDRIA, VA—Travel prices are expected to rise sharply in 2019, with hotels going up 3.7%, and flights 2.6%, driven by a growing global economy and rising oil prices, according to the fifth annual Global Travel Forecast from the Global Business Travel Association (GBTA) and Carlson Wagonlit Travel (CWT) with the support of the Carlson Family Foundation.

“While most major markets appear to be trending in the right direction, downside risks remain for the global economy given the rise of protectionist policies, the risk of stoking trade wars and Brexit uncertainty,” said Michael W. McCormick, GBTA executive director/COO. “This forecast provides travel buyers with a better understanding of the global market and key price drivers demonstrating the key to building successful travel programs will be watching and reacting to an ever-changing global landscape.”

“Prices are expected to spike in many global markets even as inflation remains subdued,” said Kurt Ekert, president/CEO, Carlson Wagonlit Travel. “The report explores the causes and includes an overview of what we expect to see in key markets worldwide. It also gives specific recommendations, giving travel managers ammunition for their upcoming negotiations.”

The 2019 forecast also shows the trends and developments that will shape the business travel industry. “The future of corporate travel can be summed up as accelerated personalization—with mobile technology, AI, machine learning and predictive analytics all playing their part,” said Ekert. “Success is tied to technology, with sophisticated data-crunching at the very heart of it.”

2019 Hotel Projections

The hotel outlook for 2019 is driven by the overall increase in air travel, which will fuel demand for rooms. Technology will also play an important part. Hotels are introducing new developments to personalize the guest experience. The increase of mobile penetration, on the other hand, is forcing travel managers to offer their travelers apps, which also serve to accommodate greater in-policy booking autonomy.

Further mergers—and upscale hotels competing with midscale ones due in part to a growing appetite for boutique accommodation among younger travelers—will also be on the agenda.

In Asia-Pacific, hotel prices are likely to rise 5.1%—with a large discrepancy as Japanese prices are expected to fall 3.2%, but New Zealand is set to rise a whopping 11.8%. In Australia, 2019 and 2020 are expected to bring the largest number of new rooms becoming available, with an increase of 3.4% of total supply each year. In Indonesia, Swiss-Belhotel International is embarking on an expansion of its budget brand, Zest Hotels, with plans to triple its portfolio of properties within three years. Singapore is embracing technology and smart hotels are on the rise. In Thailand, optimism is running especially high after a period of political tumult.

Mirroring air prices, hotel rates across Europe, Middle East & Africa are expected to rise in Western Europe by 5.6%, while declining 1.9% in Eastern Europe and 1.5% in the Middle East & Africa. Again, Norway will lead with a rise of 11.8%, followed by Spain at 8.5%, which is expected to replace the United States as the world’s second most popular destination, Finland at 7.1% and France and Germany each at 6.8%.

Within Latin America, hotel prices are expected to fall 1.3%, with declines in Argentina (down 3.5%), Venezuela (down 3.4%), Brazil (down 1.9%) and Colombia (down 0.7%). However, Chile, Peru and Mexico are expected to see 6.4%, 2.1%, and 0.6% increases, respectively.

In North America, hotel prices will go up 2.1% with 5% increases in Canada and 2.7% in the U.S.