FORECASTING
Optimistic outlook for business travel in 2018
THE AMERICAN EXPRESS Global Business Travel Forecast 2018 shows moderate price increases are expected across air, hotel and ground transportation, with demand being driven by a steadily improving global economy and growing confidence in the business travel community. American Express GBT says demand for business travel began an upward trajectory last year and is expected to continue growing over the next 12 months. Notable gains are predicted in Europe and Asia, with China and India leading the way. However, the report foresees only marginal rises in prices as suppliers rapidly increase capacity to meet demand. Despite the recovering economy, American Express GBT says businesses are still exercising caution in the face of geopolitical instability and new policies in certain markets.
Airfares Strong demand is expected to drive airfares up across all regions, but overcapacity on certain routes, the expansion of low-cost carriers and low oil prices will keep rates from increasing significantly. In the UK, short-haul economy fares are expected to go up by 0.75 per cent, while long-haul business fares are set for a rise of 0.25 per cent.
Meanwhile, one of the biggest fare increases is predicted for the US, with short-haul economy going up by 1.4 per cent and long-haul business fares expected to rise by 4.9 per cent.
Hotels Hotel performance is expected to improve globally, and a moderate increase is predicted in rates. However, total costs will go up as ancillary fees and stricter cancellation policies are applied to boost hotel profitability. In the UK, buyers can expect a 2.5 per cent increase in rates. Globally, the biggest increase is expected in Argentina, where American Express GBT predicts an eye-watering 18 per cent rise due to “promising economic activity”.
Ground transport The car rental industry has suffered from flat or negative growth in recent years, but American Express GBT predicts that car rental rates are set to rise in 2018 as companies improve their fleet management. However, competition among
suppliers will continue to be driven by ancillary services and fees. Canada may see the biggest increase
in car rental rates at 2.3 per cent, while in the EMEA region rates will rise at 1 per cent or less across the board.
AIRLINES
CAA to review airline allocated seating policies
THE CIVIL AVIATION AUTHORITY (CAA) has launched a review of airlines’ allocated seating policies after it conducted consumer research that showed that passengers are confused by the current approach. A survey of more than 4,000 people who have flown as part of a group of two or more people found that more than half said they were told by their airline that they would have to pay to ensure they could sit together. Ten per cent said they were informed after booking and a further ten per cent revealed they were never told about their carrier’s seating policy.
Although the majority of passengers understood their booking didn’t guarantee they could sit together, almost half believed their airline would automatically allocate them seats together. While half of respondents managed to sit together, 7 per cent said they had to change their seat allocation at check-in or onboard to avoid sitting apart. The research found that 18 per cent of respondents hadn’t paid extra to choose their seats and were separated from their group. The CAA says some airlines may be more likely to automatically seat groups together, but there is uncertainty from consumers on how carriers determine seating. Six in ten passengers said they paid extra to pick their seats because of the risk that their airline might split up their group. Almost half (46 per cent) felt negatively towards the carrier when they realised they would have to pay more to guarantee seats together. The CAA says it will request information from airlines about their allocated seating practices “to find out whether consumers are being treated fairly, and whether pricing policies are transparent”. It says the review will also look at airline practices in regards to improving access for disabled travellers, as well as ticketing terms and conditions.
18 BBT March/April 2018
BUYINGBUSINESSTRAVEL.COM
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