There likely will be slower growth in global travel prices in 2020 after they rose sharply in 2019, according to CWT's Global Travel Forecast.
CWT's data indicates that prices for flights will rise 1.2%
and hotels 1.3%, due to "a raft of uncertainties" that could put
a damper on pricing. CWT published the data with the Global Business Travel
"The risks and ambiguity have increased over the past
few months -- not least the threat of escalating trade wars, the impact of
Brexit, possible oil supply shocks, and the growing likelihood of recession,"
said CWT CEO Kurt Ekert.
Last year, the Global Travel Forecast predicted 2019 hotel
prices would increase 3.7% and flights 2.6%.
For 2020, North America air and hotel prices are both
expected to increase 2.3%, with CWT saying that while the U.S. economy is "thriving,
there is growing uncertainty, due to tariffs and trade wars."
The report predicts that in the hotel sector, a gradual
slowdown will "help rates return to normal, correcting the high prices
seen in some of the major cities." Washington, D.C. and New York are among
the cities expected to see price growth slow the most, to 0.2% and 1.1%,
Technology-focused areas, the report says -- such as San
Francisco, Seattle and Vancouver -- are still seeing growth.
"However, demand in these cities has been high for so
long that prices have risen too far -- and business travelers are staying
further out in response," the report says.
CWT predicts that across Europe, labor unrest, climate
change protests, global trade wars, rising oil prices and regional terrorism
all have the potential to cause a slowdown, with air forecast to grow only 0.5%
in Western Europe and decrease 0.2% in Eastern Europe. Hotel prices are
expected to grow by only 0.7%.
Egypt's hotel rates, projected to rise by 4.7% as the
country comes out of a period of unrest, is helping to push Middle East and
Africa hotel prices up 2.5%. Airfares are projected to increase by 2.2%.
CWT forecasts that Asia Pacific's expansion will slow due in
part to worsening U.S.-China relations, but that the region will remain the
most dynamic "with steady GDP growth, benign inflation and a sense of
optimism." Air and hotel rates are expected to grow by 1.3%.
Faring the worst, CWT predicts, will be Latin America, with
air prices projected to fall 1.6% and hotel rates 0.4%.
"A volatile political and economic situation in some of
the largest economies like Argentina, Mexico and Brazil will hurt prospects,"
the report says.