MINNEAPOLIS, Minn. — Global travel prices are expected to rise in the remaining months of 2022 and throughout 2023, according to the 2023 Global Business Travel Forecast by CWT, the B2B4E travel management platform, and the Global Business Travel Association (GBTA).
Overall, the world economy shrank 3.4 per cent in 2020, marking one of the worst declines since World War II. In 2021, the economy increased 5. 8 per cent, but the report says another recession is a growing concern. The current base case scenario for 2022 is three per cent growth, followed by 2.8 per cent growth in 2023. The three main forces threatening the economy and business travel include Russia’s invasion of Ukraine, inflationary pressures and the risk of further COVID-19 outbreaks.
In regard to meetings and events, the cost per-attendee in 2022 is expected to be around 25 per cent higher than in 2019, and it’s forecast to rise an additional seven per cent in 2023. Prices are fuelled by pent-up demand, uncertain economic outlook and desire to build company culture.
Additionally, business-travel airfares fell more than 12 per cent in 2020 from 2019, followed by an additional 26-per-cent decline in 2021. Economy ticket prices fell more than 24 per cent from 2019 to 2021, while premium tickets fell 33 per cent. In 2022, prices are expected to rise 48.5 per cent and another 8.4 per cent in 2023. The rising demand and price increases on jet fuel are contributing to rising ticket prices.
Furthermore, hotel prices fell 13.3 per cent in 2020 from 2019 and an additional 9.5 per cent in 2021, however the report expects them to rise 18.5 per cent in 2022 followed by an 8.2-per-cent lift in 2023. Hotel-rate increases were initially driven by strong leisure travel, but group travel for corporate meetings and events is improving, as well as transient business travel.
Finally, global car-rental prices fell 2.5 per cent in 2020 from 2019, before rising 5.1 per cent in 2021. Prices are expected to increase 7.3 per cent in 2022 and a further 6.8 per cent in 2023. Due to component shortages and supply-chain disruptions reducing auto production, the vehicle industry remains constrained in the wake of the pandemic. Rental agencies have reverted to buying used vehicles to increase fleet sizes.
“Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt,” says Patrick Andersen, CEO of CWT. “Labour shortages across the travel-and-hospitality industry, rising raw-material prices, and greater awareness for responsible travel are all having an impact on services, but predicted pricing is, on the whole, on par with 2019.”
“What we are seeing now are multiple factors coming into play when corporate-travel buyers and procurement officers model their travel programs. This eighth joint annual forecast marries statistical travel data and trend analysis with macroeconomic influences to provide a cornerstone reference point for their corporate business travel planning ahead,” says Suzanne Neufang, CEO of GBTA.