Hotel rates and airfares in Asia Pacific are expected to rise in 2014, according to a new study by American Express.
AMEX’s Global Business Travel Forecast 2014 revealed that sustained high demand for travel in the region will continue to drive up prices.
Hotel rates across Asia Pacific are expected to increase, with AMEX saying that “supply is not expected to outstrip demand in most locations”. The exception to the rule is expected to be India, where strong competition between hotels is likely to lead to a slight decline in rates.
Published airfares are also expected to increase in most Asia Pacific countries, although AMEX again noted that there are likely to be a few exceptions. These will include the Australian long-haul economy sector, which is likely to decrease by up to 5% due to increased competition from Asian carriers, and the Chinese short-haul market, which is suffering from the impact of high-speed rail services. Also in Japan, the rising number of low-cost carriers and a weaker yen are expected to contribute to slight dip in airfares.
“While growth is slowing in some local countries, the Asia Pacific region is leading the rest of world in terms of economic growth. Business travel is still a priority in this region and rates are likely to rise modestly across air, hotel and ground transport in 2014,” said Andi Budd, vice president and general manager for AMEX Global Business Travel in Singapore, Thailand & Taiwan.
Budd added however, that Asia’s two main commercial centres, Singapore and Hong Kong, are unlikely to see strong growth in terms of hotel rates and airfares next year.
“Economically, Singapore and Hong Kong continue to be heavily reliant on the financial sector in which spending on business travel remains conservative. Coupled with increased competition from low-cost carriers in these countries, we are likely to see minimal increases in long-haul airfares,” he added.
Despite this, Asia Pacific is still expected to see the strongest growth of any major global region, with the forecast rise in hotel rates (0% to 6%) and airfares (-1% to 5%) generally outpacing expected growth in Europe and North America next year.