Where the big airline and hotel price rises will be in 2019.

Steve Creedy

By Steve Creedy Fri Jul 27, 2018

It may be no secret that travel costs are going to rise but how badly you’ll be hit in 2019 depends very much on where you live and where you’re going. Carlson Wagonlit Travel and the Global Business Travel Association have just released the fifth annual global travel forecast and the news is particularly bad in some countries. Globally, the report is forecasting global price rises in 2019 of 3.7 percent for hotels and 2.6 percent for flights, being driven by a buoyant global economy and the much talked about increase in fuel prices. The forecast notes this is subject to the impact of protectionist policies such as the trade war between the US and China and implications of Brexit. But it’s when you look at some of the regional breakdowns that things get interesting: some countries will see double-digit rises while others will see modest falls.
READ: IATA predicts 2018 fare rises will top 3 percent. As CWT chief executive Kurt Ekert puts it: “Prices are expected to spike in many global markets even as inflation remains subdued.” Travelers will see some changes in the aviation sector, including the introduction of ultra-long-haul flights and increasing competition from low-cost carriers pushing into long-haul routes. Factors helping to push up airfares will include oil prices, the pilot shortage, the potential trade wars and increasing fare segmentation — the move by airlines to charge more for “extras” such as legroom —aimed at improving yield. People living or traveling in Western Europe will be particularly hard hit with airfares across the region expected to rise 4.8 percent. This will include sharp increases in Norway (11.5 percent), Germany (7.3 percent), France (6.9 percent) and Spain (6.7percent).
Eastern Europe as well as  Middle Eastern and  African countries, on the other hand, will experience a decline of 2.3 percent and 2 percent, respectively. The Asia-Pacific will see a 3.2 percent rise in airfares in 2019 with ticket prices in the booming Chinese market increasing 3.9 percent. The forecast says the vast majority of countries in the Asia-Pacific will see price rises with hot spots including New Zealand (7.5 percent) and India (7.3 percent). The exception is tipped to be Japan, where prices are likely to fall 3.9 percent as capacity is added ahead of the Olympic Games. North American prices rises are projected at a modest 1.8 percent.
“In the US, airlines are recalibrating to reflect better areas of demand, depending on how trade relationships change with key US allies and adversaries,’’ the report says. “The US aviation market is expected to see capacity compression due to expanded fare fragmentation, with premium economy and basic economy reducing available seats, as carriers target margin improvement.” There ’s good news for travelers in Latin America with airfares expected to fall by 2 percent with slight increases in Mexico and Columbia. Chile will be the exception with a forecast rise of 7.5 percent. Accommodation costs will also vary between regions with hotel prices likely to rise 5.1 percent in the Asia-Pacific, with New Zealand again standing out with a substantial 11.8 percent increase. Western Europe will see hotel costs rise 5.6 percent with substantial increases in Norway (11.8 percent), Spain (8.5 percent), Finland (7.1 percent), Germany (6.8 percent) and France (6.8 percent). North American prices will go up 2.1 percent with Canada (5 percent) outpacing the US (2.7 percent). Hotel prices will fall in Eastern Europe (down 1.9 percent), the Middle East and Africa (down 1.5 percent) and Latin America (down 1.3 percent). The exceptions in Latin America will be Chile (up 6.4 percent), Peru (up 2.1 percent) and Mexico (up 0.6 percent).  

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