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Hotel rates to rise as much as 3.5 per cent in 2016

Forecast from American Express Global Business Travel says travel managers can expect 'new era of challenges'
03/12/2015

Hotel prices across Europe will continue to rise in 2016, as demand outweighs supply

The supplier's market will continue into 2016, driving hotel prices up across Europe, while some air travel costs could be driven down thanks to continued pressure from low cost carriers.


And travel managers will have to become more familiarised with modern influences such as the shared economy and mobile booking systems, as the digital era continues to develop.


Those are the predictions contained in American Express Global Business Travel Forecast 2016, which says favourable market conditions will generally outpace increases in supply.


“While we expect modest increases in global travel prices heading into 2016, travel managers are operating in an era of new challenges and evolving disrupters,” said Caroline Strachan, Vice President Consulting, American Express Global Business Travel.


“In addition to handling tasks such as measurement and compliance, new factors such as the sharing economy and mobile booking channels are becoming increasingly popular for business travellers. In order to thrive in this digital era, travel managers need to be aware of and dynamically adapt to these forces across a variety of geographies.”


The report says hotel rates will experience "moderate price increases" across Europe, and hotel growth will be stronger in large cities where the weaker euro is spurring increased tourism. Mid range hotel prices will increase 1.7-3.3 per cent, while upper range hotels will rise by 1.8-3.5 per cent.


Air travel prices in Europe on the whole will remain "relatively stable", with growth spurred by lower oil prices. Continued pressure from Low Cost Carriers and Gulf Carriers will place strong downward pressure on fares throughout Europe, particularly on short- and long-haul routes to Asia, while premium cabin travel costs are expected to rise by as much as 3 per cent.


American Express GBT says air travel in the UK is poised for another strong year, with steady demand and new routes to be added among airlines in 2016.


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