The travel industry is an ever-changing landscape, constantly adapting to new trends and demand. Fortunately for us at World Travel, demand for business travel increased steadily in 2017, and there are no signs of it slowing down.
As we close out the first quarter of 2018, let’s look at some of the current trends in our industry. Better yet, what can we expect for air, car, and hotel rates moving forward?
To help answer this question, we sat down with World Travel’s resident expert on the subject, our Director of Consulting Services, Kelly Wagner.
In her role, Kelly and her team are constantly working with travel vendors to ensure our clients are achieving optimum savings through their negotiated programs. Below are Kelly’s predictions on what we can expect for the remainder of 2018.
What to Expect for Air, Car, & Hotel Rates
Throughout 2018, North American originating airfares are expected to rise 0.8-2.2% for economy class and 3-5% for business class, based on recent data from Business Travel News. As we have seen in recent years, airlines will continue to drive revenue through ancillary fees.
Specifically, in the United States, airlines are expected to begin reviewing and rearranging their domestic flight schedules due to weakening demand in some markets and continual overcapacity on popular international routes. The negative effects of these schedule changes could potentially be offset by the fact that American, Delta, United, and Southwest are all expanding their fleets in 2018.
For the first time in several years, rental car rates expected to rise by 1-3%. This is due to rising operating costs and tighter fleet management. Similar to airlines, car rental companies will use ancillary services and fees to drive profitability. In addition, alternative options such as Lyft and Uber will continue to force car rental companies to improve their rental experience.
Finally, hotel rates are expected to rise 2-3% this year. Luckily for many travelers, new properties and supply in many markets will limit these increases. For example, due to new hotels in the Financial District and surrounding NYC neighborhoods, as well as decreased demand for Midtown area properties, NYC will likely experience no increase in average hotel rates.
Hotels are yielding revenue more than ever to drive rates, so Kelly recommends regular audits of the preferred hotel program to ensure travelers can obtain the preferred company rates. This can be achieved annually through World Travel’s Consulting Services department.
Despite rising costs, you can also save money by supporting your preferred partners, encouraging all bookings are made with your agency of record, purchasing airline tickets in advance, reviewing your travel policy, monitoring exchanges, etc.
These are just a few of the many cost-saving strategies our consulting services department and our account managers offer our clients. They also work with our clients to evaluate their current spend, implement solutions, and track progress.
If you have a question about any of the strategies listed above, drop us a line below. We’re happy to help!
Title image by Smit Patel via Unsplash