‘Modest gains’ in travel costs predicted for 2016

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Air, hotel and ground transportation prices will see “modest gains” next year as a slowly-improving global economy and stronger demand outpace increases in supply.

The forecast comes from American Express Global Business Travel which suggests the UK is poised for another strong year for air prices with steady demand and new routes being added among airlines.

However, continued pressure from both low-cost carriers and Gulf airlines will place strong downward pressure on fares throughout Europe, particularly on short and long-haul routes to Asia.

Global hotel performance is also expected to improve moderately in 2016, as limited increases in inventory fail to keep pace with the growing global appetite for travel.

North America is expected to continue its momentum from 2015 and see healthy rate increases, while Asia-Pacific and Europe will show moderate gains.

Ground transportation rates are expected to remain relatively flat as overcapacity, strong competition and a continued focus on ancillary fees persist globally.

Car-sharing services is projected to see significant growth in 2016 as major car rental companies make further investments in the sector.

Amex Global Business Travel vice president, consulting, Caroline Strachan, said: “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.

“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.”

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