2017 a Mixed Bag for Corporate Travel

Advito’s forecast for next year predicts sluggish activity in Europe and parts of Asia, with real growth to be found in the globe’s emerging markets.

2016 may not be over, but industry experts in corporate travel are already predicting what the future will hold for next year.

Travel consultancy Advito has just released its industry forecast report, which gives a mixed view of the global market for 2017. Multiple factors, including the threat of global terror and Brexit, have meant that many businesses have reduced their travel budgets.

In North America, it is expected that increased competition between carriers will help to keep airfares relatively low. However, Advito has issued words of caution when it comes to the region’s hotel rooms.

As quoted by Skift, the report says that corporate buyers can “…expect hotel chains to further reduce the number of rooms they make available at a negotiated discount.”

“They will instead push harder for corporate clients to switch to dynamic pricing. With negotiating options narrowing for corporate clients, we expect rates to rise in 2017 by three to five percent in the U.S., with smaller increases for hotels in Canada and Mexico,” the report added.

Over in Europe, it is predicted that despite concerns over Brexit, the cost of business travel will remain cheap, largely thanks to the growth of the region’s budget carriers. The report advises that “increasing uncertainty about the implications of Brexit, potential political leadership changes and security issues will soften what might otherwise have been a strong seller’s market in 2017.”

As a whole, corporate travel demand in Asia is slowing in-line with halting regional growth, but the business hubs of Tokyo, Shanghai and Hong Kong are expected to buck this trend. Leisure travel, however, is increasing, which in turn generates higher demand. In the sub-continent, an overall increase in capacity will help to keep the cost of travel to and from India low.

But the real story of 2017, according to Advito’s report, belongs to the globe’s emerging markets.

Taken as a whole, these “…are set for a stronger economic performance in 2017…[and] this improvement is largely driven by Latin America,” but Asia and India will also be a strong driver of global growth.

[Photo: Air Travel Industry]