According to American Express Global Business Travel in its Global Business Travel Forecast 2013, projected increases in business travel pricing in select markets in Asia, Latin America and Eastern Europe indicate business travellers will likely continue to travel in these regions to pursue business opportunities next year.
However, global economic uncertainty – particularly due to the fiscal crisis in Europe and deceleration of growth in China – is expected to curtail demand and keep rates in mature markets, including China, relatively flat. Taken together, American Express Global Business Travel forecasts prices globally to increase only modestly.
“The performance of business travel across Asia Pacific in 2013 will vary country to country but there are specific markets that will likely see moderate levels of growth including India, Australia and Singapore,” said Dr Carl Jones, head of American Express Advisory Services for the Asia Pacific region.
“Our Forecast helps companies understand where in the world and in which categories prices would likely increase and by how much, so they can make smart and informed decisions about how their investment in business travel is best allocated.”.
Asia-Pacific (APAC) airfare projections
Market performance will vary across the region in 2013, with countries like India, Australia and Singapore seeing moderate increases in airfare.
- APAC short haul (economy): -1% to 4%
- APAC long haul (economy): -1% to 4%
- APAC Intra-APAC (economy): -1% to 4%
- APAC short haul (business): 0 to 4%
- APAC Long Haul (business): 0 to 4%
- APAC Intra-APAC (business): 0 to 4%
Airfares in Singapore are likely to experience moderate change of -1% to 2% for Intra-APAC (economy) and 1%-4% for long haul (economy).
Dr Jones said the continued rise of low-cost carriers’ capacity is acting to limit price growth for intra-Asia. This trend is expected to continue throughout 2013. For long haul economy, prices will continue to rise in line with inflation with capacity balanced by continued demand.
Airfares in China in 2013 will likely be relatively flat as a result of numerous factors, including a slowdown in GDP growth and government-imposed restrictions on price changes. For domestic flights, in particular, competition with high-speed rail is predicted to exert pricing pressure on both business and economy segments in China.
Dr Jones added that that India could see airfare increases as high as 8%, largely as a result of volatility in the country’s air industry.
Asia Pacific 2013 Airfare Forecast
Overall airfares in Asia Pacific will be flat or see slight decreases to very modest growth with India and Australia seeing moderate increases in airfares.
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Asia-Pacific (APAC) hotel projections
Hotel rates in APAC, like airfares, are expected to differ widely at both the country and city levels. Within China, for instance, predictions reflected that prices in Shanghai suffer from an excess of supply, while in Beijing demand is beginning to outstrip supply.
The Forecast predicts that in Singapore price movement of corporate negotiated hotels rates will range from flat to an increase by 4% due to continued demand from both premium leisure, leisure and corporate travel,albeit moderated by a slower economic outlook. Activities such as the Grand Prix and promotion of Singapore as a preferred MICE location, will continue to attract inbound visitors and keep occupancy rates buoyant.
- Mid-range hotels: 0% to 4%
- Upper-range hotels: 2% to 7%
“Many Asia Pacific economies are experiencing a relative slowdown of their economic growth, which has led to conservative predictions for change in hotel rates for Asia Pacific. Irrespective of how these rates perform, it continues to be important for companies to view their hotel spend as an investment and to ensure that they have an accommodation strategy to support this. We strongly recommend organizations to have a clear process in place to mitigate these prices increases, through consideration of controls, visibility of hotel selections, and keeping ancillary fees in check,” said Dr Jones.
Asia Pacific 2013 hotel rates forecast
Corporate negotiated rates in the region should be up between 1% and 6%, with mid-range hotels seeing a lower range of up by 0% to 4%, and upper tier properties seeing a higher range of up by 2% to 7%.
