HOTEL and airfare rates will remain relatively flat in 2015 as cooler economic growth in Asia-Pacific (APAC) and forces of supply and demand exert pressure on a region that has seen dynamic growth in the previous years.
The American Express Global Business Travel Forecast 2015 indicated that air and hotel prices will remain stable this year as China’s economic growth pans out, legacy airlines continue to dominate in the face of low-cost upstarts, and local companies remain cautious.
It predicts that international flights fares from APAC will grow between -1 and two per cent for business class; and between 01 and one per cent in economy. Intra-regional flights should do slightly better – one to two per cent for business class, zero to two per cent in economy.
Out of Singapore, business class flights will moderate by between -1 and one per cent, while economy class seats will increase by one per cent at most.
APAC’s hotel pipeline is bursting at the seams and keeps rates in check, and the forecast anticipated lower rate increases for 2015 as compared to 2013-2014.
Mid-range hotels in APAC will hike rates between 0.8 to 3.5 per cent, while upper range hotels will increase prices by 0.7 to 3.5 per cent, driven partially by China’s anti-graft measures that have hit the luxury hotel market hard.
Andi Budd, vice president and general manager, American Express Global Business Travel, ASEAN, commented in a press statement: “While predicted rate inceases in 2015 may not be significant, travel manager are still seeking to reduce the overall cost of their managed travel programme, or at least not increase expenditure significantly.”
Companies are switching to LCCs, trimming trip lengths, booking online and in advance, and also consolidating bookings to particular hotel chains, all in an effort to cut costs, he noted.
“However, as we near the end of Q1 2015, it is clear there is still an appetite for business travel among our customers who see it as important for growth and expansion of their businesses,” said Budd.