“Moderate” growth for Asia Pacific travel costs in 2016
Contributors are not employed, compensated or governed by TD, opinions and statements are from the contributor directly
Air fares and hotel rates in Asia Pacific will experience “moderate” growth in 2016, according to a new report.
The new American Express Global Business Travel Forecast, which was released this week, reveals that Asia Pacific air fares will rise by no more than 3.5% next year, depending on route and cabin class, while the region’s hotel rates are not expected to increase more than 4%.
Intra-Asian air routes are expected to see the slowest growth rates, rising no more than 2% in business and economy class cabins, while international fares are expected to rise between 0.6% and 2.6% in business class and between 1% and 2.7% in economy.
Domestic economy class fares are forecast to see the sharpest growth, but this is still expected to be in the region of just 2% to 3.5%.
According to the report, China will also show a “mild uptick” in airfares as demand keeps pace with increased capacity, while India is expected to see strong growth as a “booming economy and poor ground infrastructure combine to push more travellers to solicit air options”.
In the hotel sector, Asia Pacific room rates are expected to rise between 1.3% and 3.7% in the midscale sector and between 1.6% and 4% in the upscale market, although the report noted that changes will “vary significantly by market”.
China, for example, will “continue to enjoy strong demand reflected in higher average daily rates and occupancy numbers”, according to the report, while favourable exchange rates and limited inventory will fuel substantial rate hikes in Sydney and Tokyo. In India however, stronger demand is being offset by overcapacity, which the report states will result in “relatively shallow rate increases”.
Globally, American Express Global Business Travel predicts “modest gains” in terms of travel costs in 2016, with “favourable market conditions in North America” being offset by “tempered growth in Asia”.
Comments are closed.