Carlson Wagonlit Travel’s 2013 Travel Price
Forecast indicates that prices in most areas of travel spend are
expected to grow modestly around the globe next year, with the
most significant inflation expected throughout the Asia Pacific
and Latin America regions.
CWT’s forecast combines a statistical model that
uses CWT global client data with the market and industry knowledge
of CWT experts around the world, to provide price projections for
every region, as well as country and local-level expectations for
those destinations to which CWT clients most frequently travel.
CWT’s forecast also addresses the additional factors that can
directly affect overall travel spend and traveler satisfaction,
such as safety and security and use of technology.
“Price increases in 2013 will begin to level off
in most regions throughout the world compared to what travel
buyers experienced in 2012, as booming economies like Asia
Pacific’s begin to normalize, and as uncertainty remains in
Europe,” said Nick Vournakis, senior vice president, Global
Product Marketing and CWT Solutions Group. “While slightly higher prices will be the reality again next year as demand for travel
outpaces supply in most places, our forecast demonstrates there is
still plenty travel buyers can do to watch costs and take care of
travelers through other measures, including reexamining how they
influence traveler behavior.”
Asia Pacific (APAC) region has experienced strong economic growth
over the past several years, which quickly drove prices upward.
Growth in 2013 is expected to stabilize, which will likely lead to
modest price increases, although specific results vary widely by
- Airline prices should increase about 2.5%
in the APAC region during 2013, largely due to the number of
low-cost carriers (LCCs) entering the market and holding pricing
down from what would typically be observed in this part of the
- Average daily hotel rates in APAC will likely
increase about 3.5% in 2013. Singapore will lead the way
with an 8% increase amid strong travel demand and lagging
supply; meanwhile, prices in Hong Kong will also increase more
than the regional average as clients shift from 4-5 star
properties to 3-star.
- APAC car rental rates will likely
experience the highest inflation of anywhere in the world. CWT
forecasts a 5.9% increase in 2013. Rates in Australia and
New Zealand will perform quite strongly due to increased demand
and more tightly managed fleets.
- Meetings & events spending
will increase about 6% while group sizes will decrease around 3.8%
as organizations attempt to mitigate rising supplier prices by
holding a larger number of smaller meetings with fewer attendees
and shorter durations.
America (LATAM) region continues to experience overall economic
growth, though significant disparities continue to exist that will
create varied travel pricing by country next year. The newly
formed LATAM Airlines, which is now the world’s second largest
airline by market value, will embark on its first full year of
operation in 2013, which may result in improved routes and
frequencies to, from, and within the region.
- Two pricing
scenarios exist in LATAM’s air segment. Countries with healthy
economies like Brazil and Chile will experience solid price
inflation, while countries with weaker economies like Argentina,
Colombia, Mexico, and Peru expect moderate decreases to only
slight growth. Due to that, CWT expects 2013 airline pricing in
the region to increase 1.3% overall.
- Average daily
hotel rates in LATAM will likely rise about 6.3% during
2013. Brazil will see the largest increase in hotel rates, and in
fact, is the only nation in CWT’s entire 48-country forecast
expected to see double-digit price increases next year. This is
due to strong demand and limited supply; however, that will soon
change, as inventory is rapidly being added in Brazil to
accommodate the 2014 FIFA World Cup and the 2016 Summer Olympics.
Even underperforming economies will experience noteworthy price
inflation given continued international demand amid stagnant
- Car rental rates will likely
increase 1.4% during 2013, primarily due to U.S.-based
brands expanding operations in the region to meet increasing
demand. However, Brazil-based Localiza is a major player that will
offer an added element of competition to international suppliers
in that market specifically.
- Per attendee per day spending
increases for meetings & events in LATAM will be the highest in
the world, with average increases of 11%. Meanwhile, group size
will decrease about 7%. As in Asia Pacific, this dynamic will
occur as buyers seek to offset higher supplier costs.
While the economies of the United States and Canada are
experiencing slow and steady improvement, there is no major growth
expected for the foreseeable future, which will help contain
travel price increases in 2013 for most categories of spend.
- CWT forecasts airline pricing in North America to increase
by 2.8% during 2013. Carriers in both countries will
continue to stay disciplined about controlling capacity to ensure demand outpaces supply, enabling them to raise prices.
Average daily hotel rates will likely increase 3.2%
throughout next year. As always, increases will vary by market,
with the top business destinations able to command much higher prices. Western Canada will experience particularly high increases
based on an influx of foreign demand for the area’s energy and
- For yet another year, car rental firms in
North America will struggle to raise prices in 2013 as the
marketplace remains highly competitive with only a few existing
suppliers available to battle for corporate business. Given this
reality, CWT forecasts pricing to decrease 1.1%.
Meetings & events spending continues to grow, with an average 4.8% increase expected in cost per attendee per day, along with
an average 6% increase in group size. Booking windows have
increased 5% as organizations feel more confident about the
future; given this, advance bookings for 2013 are already strong.
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