American Express Global Business Travel this week released its 12th annual Business Travel Forecast, revealing moderate price increases are expected for air, hotel and ground transportation prices next year. Global hotel performance is expected to improve in 2016, as limited increases in inventory fail to keep pace with the growing global appetite for travel.
Overall, North America is expected to continue its momentum from 2015 and experience healthy rate increases, while Asia-Pacific and Europe will show moderate gains.
Additional global hotel pricing predictions include:
In North America, hotel rates are expected to trend upwards, with a healthy pipeline of new construction on the horizon. However, the impact from added inventory is not likely to appear until after 2016. Across Canada, variability persists within each province, however, the country is expected to see more moderate price increases (2.5 percent) in 2016.
While Latin America continues to face bouts of economic weakness and political uncertainty, hotel rates are likely to rise as a result of inflationary pressures heading into 2016. Due to its robust manufacturing outlook and solid domestic consumption, Mexico remains one of the strongest economies in Latin America and is poised to experience favorable growth next year.
Across Europe, the Middle East and Africa, hotel rates are predicted to rise slightly, especially in larger cities where the weaker euro is spurring increased tourism. In the Middle East and Africa, an increasing inventory of mid-range offerings will provide travelers with more affordable choices, but rates will still rise on stronger economics in 2016.
In Asia Pacific, mid- and upper-range hotels are likely to experience moderate growth in 2016, although variability persists across the region. Mid- and upper- range hotels in Asia Pacific are likely to experience moderate growth in 2016, although this varies significantly by market. While the anti-corruption campaign for government officials still impacts luxury hotels across China, the country continues to enjoy strong demand reflected in higher average daily rates and occupancy numbers. Favorable exchange rates and limited inventory is fueling substantial rate hikes in Sydney and Tokyo, while the end of the mining boom is having the opposite effect in the western half of Australia. In India, stronger demand is being offset by lingering overcapacity that should result in relatively shallow rate increases.