Airfares in the Asia Pacific region will remain relatively unchanged next year, a new report has found.
In its Global Business Travel Forecast 2017, American Express Global Business Travel revealed that regional fares may experience slight fluctuations, depending on route and cabin class, but overall prices will remain flat.
“Despite high demand and relative political stability, overcapacity is keeping rates in check,” the forecast stated. “Travel prices are heavily driven by leisure demand from China, and India has emerged as the fastest growing industry in the region, with capacity just keeping pace with demand.”
The strongest growth rates are expected to be just 1.5%, expected for domestic economy class fares in China and international business class fares in India. Other fare types are likely to see growth of less than 1%, and in some sectors fares are expected to see slight declines. These include international business class fares from Singapore (-1.0%) and Japan (-0.8%).
The hotel sector is expected to see higher growth however; average daily rates in all major Asia Pacific countries are forecast to rise at rates of between 1% and 3%, with India and Japan at the higher end of the scale.
Globally, American Express GBT said that the cost of business travel in 2016 was “uneven”, and that the outlook for next year will be “similarly subdued”.
“The continued slowdown of the Chinese economy and depressed oil prices, the United Kingdom’s impending departure from the European Union, growing populist politics and increased security concerns in many countries have together created a higher level of uncertainty in the global marketplace. It remains to be seen how this will impact business travel over the next year,” the report added.
Overall, global demand for air travel remains at a record high, but low fuel prices and strong competition will help keep airfares in check. Hotel rates are expected to see moderate growth, while ground transportation prices are likely to remain flat.