Copenhagen, March 25, 2015 – Lower oil prices are providing a boost to economic activity and should encourage some airlines to grow capacity and keep fares in check, according to travel consultancy Advito’s update to their annual Industry Forecast. Some airlines in Asia have responded by eliminating fuel surcharges or lowering their fees.
Meanwhile, economic recovery has given hotels the confidence to push for strong rate increases in North and South America. They’re also becoming smarter at yield management, more quickly closing out discounted rates, thus pushing up average prices. Rates shouldn’t rise as sharply in Europe as demand is still weak, and supplier capacity growth will make it difficult for hotels to raise rates in the Middle East.
Advito monitors changes in economic growth, inflation, travel demand and oil prices. Each quarter, it revises its annual Industry Forecast to reflect changes to the original air and hotel pricing predictions for the year.
The update and the original Advito 2015 Industry Forecast are available at www.advito.com(in the Insights section under »Industry Forecast«). Following are a few of the update’s key findings:
The outlook for the world economy is slowly improving, as the rates of economic growth delivered by the advanced economies and emerging markets converge. Global economic growth will pick up from 2.6% to 2.9% in 2015, although this is slightly lower than Oxford Economics’ earlier forecast of 3.0%.
Lower oil prices make it difficult for airlines to raise fares, but give them the scope to drop prices, particularly in markets with competition. They’ll also encourage airlines to slowly add in new capacity, providing further relief to average fares, especially for economy-class travel.
Rapid low-cost carrier (LCC) growth continues to drive fares down in Asia and the Middle East.
Advito made some changes to the average daily rate (ADR) forecasts for individual countries, but updated just one regional forecast. A weakening of the economic outlook across Asia will affect demand growth, thus prompting Advito to lower the rate forecasts for China, India, Singapore, South Korea and Indonesia. The regional forecast is now down to 1-3% from 2-4%.
The travel industry’s leading consulting firm,Advito provides travel-management advisory,procurement and outsourcing servicesthat guide clients through a complex travelenvironment. Advito delivers proven value,unbiased counsel and a customized approachfor clients that range from $2 millionto more than $400 million in airline volume.Advito offers a full spectrum of travel programconsulting solutions including air, hoteland car program management, RFP andsourcing strategy development, benchmarking,integrated travel and meetings consulting,policy and governance and paymentand expense consulting. Headquartered inChicago, Advito operates in key businessmarkets around the world as an independentoperating unit of BCD Travel.
For more information, visit www.advito.com
About BCD Travel
BCD Travel helps companies make themost of what they spend on travel. Fortravelers, this means keeping them safe andproductive, and equipping them to makegood choices on the road. For travel andprocurement managers, it means advisingthem on how to grow the value of theirtravel program. For executives, we ensurethat the travel program supports companyobjectives. In short, we help our clientstravel smart and achieve more. We makethis happen in more than 100 countrieswith more than 11,000 creative, committedand experienced people. And it’s how wemaintain an industry-leading client-retentionrate of over 97%, with 2013 sales of US$22.4billion.
For more information, visit www.bcdtravel.com
About BCD Group
BCD Group is a market leader in the travelindustry. The privately owned companywas founded in 1975 by John Fentener vanVlissingen and consists of BCD Travel (globalcorporate travel management), Travix(online travel: CheapTickets, Vliegwinkel,BudgetAir, Flugladen and Vayama), Park ‘NFly (off-airport parking) and joint venturesParkmobile International (mobile parkingapplications) and AERTrade International(consolidating and fulfillment). BCD Groupemploys over 12,000 people and operatesin more than 100 countries with total sales,including US$ 9.2 billion partner sales, ofUS$ 24 billion.
For more information, visit www.bcdgroup.com