AMEX forecasts slower hotel and airfare rate hikes in 2013

Global economic uncertainty and the emergence of LCCs are likely to result in muted airfare and hotel rate increases in the coming year across Asia-Pacific (APAC), predicts American Express Global Business Travel.


The TMC’s Global Business Travel Forecast 2013 anticipates that shorthaul economy airfares in APAC are expected to grow between minus one and four per cent versus one and five per cent in 2012. Business shorthaul fares, on the other hand, are forecast to rise zero to four per cent compared to two to six per cent the previous year.

The growth in economy intra-APAC fares will slow to minus one to four per cent from one to five per cent in 2012, while business intra-APAC fares will increase by a paltry zero to four per cent, compared to five to 10 per cent last year.

According to Carl Jones, head of American Express Advisory Services for Asia-Pacific, the dip in airfare rises in 2013 can be partly accredited to the increasing competition from LCCs sprouting across the region, which has compelled flag carriers to keep their business and economy fare rises low to compete in the leisure segment.

“This is naturally a great boon for businesses, which are now keeping a closer watch over their travel expenses owing to the poorer global economic conditions.”

He added that airfares in China in 2013 would likely be relatively flat due to the slowdown in GDP growth, as well as government-imposed restrictions. India, which he termed as a “unique aviation market”, is predicted to see airfare hikes as high as eight per cent.

Meanwhile, hoteliers are expected to suppress rate rises next year in an effort to claw more corporate business. Mid-range hotel rates in APAC are forecast to rise by just zero to four per cent in 2013, relative to six to 10 per cent in 2012. Upper-class hotels are expected to up rates by two to seven per cent versus six to 10 per cent a year ago.
-TTG Asia.