Global travel prices are expected to continue to rise for the rest of 2022 and throughout 2023, driven by rising fuel prices, labour shortages and inflationary pressures in raw material costs, new data has shown.
Business travellers can expect increases of 8.4% in air fares, 8.2% in hotel rates and 6.8% in car rental charges next year, according to a new forecast by the Global Business Travel Forecast, published by CWT, and the Global Business Travel Association (GBTA).
The forecast for 2022 is a 48.5% rise in air fares, an 18.5% hike in hotel rates and a 7.3% increase in car rental charges, the report said.
Russia's invasion of Ukraine and other geopolitical uncertainties, inflationary pressures that are pushing costs up, and the risk of further outbreaks of Covid that could restrict business travel, were cited by the report as three of the main factors exerting pressure on the economy and the business travel industry.
"Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt," said Patrick Andersen, CWT's chief executive.
"Labour shortages across the travel and hospitality industry, rising raw material prices, and greater awareness for responsible travel are all having an impact on services, but predicted pricing is, on the whole, on par with 2019."
The global travel forecast highlighted changes in travel prices from 2019 to 2020, when the Covid-19 pandemic struck, and noted that business travel airfares fell over 12% in 2020 from 2019, followed by a 26% decline in 2021, with economy tickets falling over 24% between 2019 and 2021, while premium tickets dropped 33%.
Even with a 48.5% increase in 2022, prices will remain below pre-pandemic levels through 2023, the report said.
Ticket prices are climbing due to rising demand and higher jet fuel prices, which have more than doubled in some markets to over US$160 a barrel, according to S&P Global.
In 2020, global car rental prices fell 2.5% from 2019, before rising 5.1% in 2021. In 2022, prices are expected to rise 7.3%, hitting new highs, with further growth of 6.8% in 2023.
Likewise, hotel rates fell 13.3% in 2020 and 9.5 % in 2021. In 2022, hotel rates are expected to increase 18.5 %, followed by an 8.2% increase in 2023.
European, Middle Eastern & African, and North American hotel prices have already surpassed 2019 levels and are expected to do so globally by 2023, the report added.