Carlson Wagonlit Travel (CWT), specialized in business travel, meetings and events management, released its 2012 Travel Price Forecast, which projects supplier prices for airlines, hotels, ground transportation providers, and meetings and events (M&E) spend.
CWT's 2012 forecast, released Oct. 17, provides projections for every region of the world, as well as country-level expectations for those markets to which CWT clients most frequently travel. CWT's analysis confirms that prices in most geographic areas and for most categories of spend are expected to rise in 2012, with the most substantial increases to occur in the Latin America region.
“Travel buyers in most parts of the world are facing tough negotiations as the landscape increases in complexity,” said Nick Vournakis, vice president of CWT Solutions Group. “At the same time, economic uncertainty continues in some parts of the world and has resurfaced in others, prompting increasing questions on exactly what 2012 holds in store for organizations and, by extension, for business travel.”
Latin America growing rapidly, creating substantial price increases
Latin America (LATAM) will experience some of the most substantial price increases of any region across the main areas of travel spend, although a closer look reveals disparate conditions by country, with some local economies prospering and others suffering from political uncertainty and economic instability.
Car rental rates, because of how much it fluctuates within the region, is expected to decrease by 2.2 percent or could do just the opposite and increase up to 5.6 percent.
CWT forecasts airline pricing to increase by about 5.8 percent in 2012, with increases in Colombia topping the charts at 7.9-11.4 percent. This is primarily due to rapidly increasing demand and limited supply in the region.
Average daily hotel rates during the first half of 2012 are expected to increase by 9-11.8 percent, and increase by 10.1-12.2 percent during the second half of the year. Brazil could see increases of more than 24 percent in the first half of 2012 and up to a 34 percent increase during the second half of 2012.
Asia Pacific continues to flourish; prices to increase
The Asia Pacific (APAC) market is thriving, leading the way in many economic indicators and correspondingly, in business travel volumes.
However, APAC travel prices will be flatter in 2012 on a quarter-over-quarter basis — given that the region was not as affected by the economic downturn as other parts of the world, and has already experienced strong growth rates throughout 2011.
Car rental rates in APAC will remain relatively flat, ranging from a decrease of 1.7 to an increase of 3.9 percent in 2012 in Australia and New Zealand, two of the primary rental car markets in the region.
CWT forecasts airline pricing in APAC to increase by 3.1-3.8 percent in 2012 as a dynamic mix of legacy airlines and a growing group of low-cost carriers compete for travelers, holding down fares in the region.