Airfares expected to rise through 2015
With rising demand, favorable cost structures and slowly expanding capacity, airfares are expected to rise gradually through 2015, by as much as 2.2 percent, although low-cost carriers are limiting price increases in some regions.
Latin America will see the highest price increases of any region advancing 3.5 percent, while price growth in Europe will be much more modest. Expect the growth in traffic among low-cost carriers to lead to diminished pricing power of many legacy carriers in Asia Pacific and North American air prices to be driven by airline consolidation and falling capacity.
Hotel suppliers will be in a better negotiating position than they have been for some time in 2015, due in part to stronger demand and investor interest, and favorable capital costs. This improved outlook could lead to greater pressure on negotiated rates for travel managers and buyers, and globally, prices are expected to rise by as much as 2.6 percent.
Price growth will be led by Latin America, where we expect a 6.3 percent increase in managed rates. Hotel prices in North American and Asia Pacific will see moderate growth, while hotel rates throughout EMEA will grow slower than the global average throughout 2015.
In contrast to the air and hotel sectors, the ground transportation industry has an abundance of supply. With industry consolidation and strong competition, global prices are expected to remain flat throughout 2015.
The trend will be similar across all regions, except Latin America, with moderate price growth of 2 percent expected in 2015 based on generally high travel demand throughout the region.
Meetings & Events
Compliance will remain a concern for the meetings & events sector next year, regardless of industry or geography. While there are some exceptions by country, there are several trends expected across the industry in 2015, including a rise in the use of social technology.
It is expected that there will be more domestic meetings and shorter booking lead times across the globe in 2015. Mid-price hotels offering core meetings & events services will be most poplar. ■