After posting sharp rises in 2019, prices in the global travel industry are likely to slow in 2020, with flights rising a modest 1.2%, hotels rising only 1.3%, and rental car rates up 1%, according to the sixth annual Global Travel Forecast, published today by CWT and GBTA. While the global economy is doing well overall – and expected to grow a solid 3.6% in 2020 – a raft of uncertainties are set to put a damper on pricing.
North America: 2.3%
The hotel industry has seen slow, but steady growth. A gradual slowing will help rates return to normal, correcting the high prices seen in some of the major cities. Technology-focused areas – like San Francisco, San Jose, Seattle and Vancouver – are still seeing growth. However, demand in these cities has been high for so long that prices have risen too far – and business travelers are staying further out in response.
Asia: 1.3%
Asia’s hospitality industry is booming with hotel investment volumes predicted to grow 15% year-on-year. Japan will host the Rugby World Cup later this year, and the Olympic and Paralympic Games in 2020, which will boost visitor numbers to the region. The Japanese hotel market is seeing a sharp increase in supply to accommodate the anticipated surge in visitors to the country during these events.
Eastern, Western Europe: 0.7%; Middle East & Africa: 2.5%
Denmark and Egypt are both countries to watch with hotel prices in Denmark expected to fall next year. On the other hand, Egypt’s rates are on the up – projected to rise by 4.7% – as its economy settles down after a period of unrest.
Latin America: -0.4%
Following a steady decline in new hotels from a 2015-2016 peak, things may be picking up, with Mexico leading the way. More than 10 new corporate chain hotels opened in the region in the first quarter of 2019 with growth set to continue throughout 2020. Properties in Mexico and across Latin America are likely to continue to cut prices.