CWT Traveler

September 2018

CWT

Global Travel Forecast 2019: Economy buoyant, travel costs on the rise

CWT has published its fifth annual Global Travel Forecast together with GBTA and with the support of the Carlson Family Foundation. This extensive report offers travel managers and purchasers important and useful information about price developments on the business travel market.

In 2019, rising oil prices and a growing global economy are expected to push up prices for business travel services. In Western Europe, hotel prices are forecast to go up by 5.6 percent and flight prices by 4.8 percent.

Although the economic forecast overall is positive, developments such as protectionism, Brexit and the risk of a trade war are causing uncertainty. The Travel Forecast provides orientation and an overview of trends on the travel market.

The study observes several factors that can cause prices for flights to soar: On the one hand, higher oil prices naturally have a direct impact on kerosene prices and therefore on airfares. On the other, personnel costs are also expected to increase: Rapid fleet expansion and high retirement rates have resulted in a shortage of pilots.

Recruiting and training costs will be accompanied by demand for better wages and working conditions from the existing employee base. The pressure on costs for airlines will translate into higher prices, which they will be able to pass on to travelers given the high demand.

At the same time, the presence of aggressive, low-cost airlines in Europe is expected to boost competition in the aviation sector. Traditional airlines will therefore stick to fare segmentation – in other words offering different price levels, perks and restrictions. That means travelers can choose from a variety of preferences that match their priorities and budget. On the other hand, airlines will continue to charge ancillary fees and raise costs.

A further development is New Distribution Capability (NDC), a technology platform that allows airlines to distribute richer content across different channels, enable product differentiation, personalized services, dynamic pricing, and an overall transparent shopping experience.

2019 will also see the comeback of ultra-long-haul flights lasting more than 17 hours. At the same time, low-cost carriers are entering the long-haul market in Europe and Asia, putting even more pressure on airlines.

In the next issue of CWT Traveler, we will present price forecasts for hotels and other means of transport. And in the third part of this mini-series, we will give you recommendations on how to implement what you have learned in your travel policy and your purchasing strategy. So stay in touch!

To read the complete forecast in English, download it here.

Our Partner

CWT Traveler

Our monthly online newsletter CWT Traveler delivers the latest information and offers from the business travel industry.

Archive