Airfare, hotel and ground transportation costs on the way up: CWT

Airfare, hotel and ground transportation costs on the way up: CWT

TORONTO — Travel prices are expected to rise in 2019, with hotel rates increasing by 3.7% and airfares going up 2.6%, according to CWT’s latest Global Travel Forecast.

The annual study, in conjunction with GBTA, shows rising prices will be driven by a growing global economy and rising oil prices.

Here’s a look at the highlights:

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 travellers apps, which also serve to accommodate greater in-policy booking autonomy.

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

In North America, hotel prices will go up 2.1%. In Canada the increase is expected to be 5% and in the U.S., 2.7%.

2019 Ground Transportation Projections

In 2019 ground transportation pricing is expected to rise just 0.6% in North America, while prices in the rest of the regions will remain flat. However, by Q4 2019 the industry should expect to see a concerted effort by car rental companies to raise prices. In North America, the projected increase for corporates is 6%.

Next year should also see a growing preference among travellers for ride-hailing apps while interest in high-speed trains is fading, due to high network costs and low-tech distribution systems, according to the study.

Mobile mobility will rise. On-demand, shared, electric, and connected cars will all become more popular. Connected car technology has the potential to change the entire automotive industry.

In North America, Canada is expected to see a 3.6% increase in 2019, but the overall region will only be up 0.6%. In the U.S., the Audi-owned, app-based car rental service, Silvercar, continues its aggressive expansion. The company offers mobile-first car rental without the lines and paperwork.

2019 Air Projections

The aviation sector will be shaped by the introduction of ultra-long-haul flights and an increasing competition from the low-cost carriers, which are not only multiplying but also fighting fare segmentation to improve yield, says the study.

Airfares are likely to become more expensive due to rising in oil prices, the competitive pressure from the shortage of pilots, potential trade wars, and increasing fare segmentation to improve yield.

North America will see prices rise by about 1.8%, according to projections. “In the U.S., airlines are recalibrating to reflect better areas of demand, depending on how trade relationships change with key U.S. allies and adversaries. The US aviation market is expected to see capacity compression due to expanded fare fragmentation, with premium economy and basic economy reducing available seats, as carriers target margin improvement.”

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