- The Straits Times
Planning an epic trip of a lifetime in 2018? Be warned, your wallet might not take the news so well.
That’s because airfares and hotel prices are expected to rise worldwide next year, according to a new report by business travel management firm Carlson Wagonlit Travel.
Globally, airfares are expected to increase by 3.5% while hotel prices are expected to rise by 3.7%. Ground transportation such as taxis, trains and buses are not spared either – with a slight 0.6% rise expected for 2018.
“The higher pricing is a reflection of the stronger economy and growing demand,” said Kurt Ekert, president and CEO of Carlson Wagonlit Travel. “The global numbers from this forecast should be considered strong leading indicators of what 2018 will mean for global businesses, as we anticipate higher spending.”
Although airlines are projected to add around 6% capacity in 2018, airfares are expected to rise because of changing crude oil prices, the 2018 Global Travel Forecast reported.
In Singapore, airfares are expected to rise 3.9% in 2018, partly due to higher fuel oil prices, fare segmentation and new long haul routes. The opening of Changi Airport’s Terminal 4 could also lead to higher airport development fees, the report said.
Complicating airline pricing is increased segmentation of basic fares among large carriers. Many airlines now provide the option of choosing a basic economy, restricted fare, with specific service options and pricing varying by airline.
In Asia Pacific, airfares are predicted to rise 2.8% as domestic demand, particularly in China and India, increases.
Airfares will likely jump the most in Europe, with projected increases of 7.1% across Eastern Europe and 5.5% in Western Europe. The increase for Middle East and African countries is much lower at 3.0%, as the region continues to deal with security threats and a recovering oil industry.
Over in North America, the rise in airfares will likely be more modest at 2.3%, the report added.
Singapore could also see a 3.2% rise in hotel prices, partly caused by consolidation among hotel groups which results in fewer competitive price options typically seen in more fragmented markets.
In the Asia Pacific region, hotel prices are expected to rise 3.5% although predictions vary across the board. In Japan, hotel prices are actually forecasted to fall by 4.1%, while New Zealand’s hotel prices will rise by close to 10% at 9.8%.
Over in Eastern Europe, hotel prices are expected to rise 6.6% in Eastern Europe, while the increase in Western Europe is estimated to be around 6.3%, with Norway taking the lead at 14.0%. Thanks to the 2018 Summer World Cup, hotel prices in Russia are also expected to increase by 11.9%.
In contrast, hotel prices in the Middle East and Africa are expected to rise by just 0.6%, while hotel prices in Latin American countries Brazil and Argentina are expected to fall by 8.7% and 2.7% respectively.