Global airfares, hotel rates to rise in 2019: industry forecast
Travelers make their way up the arrival ramp at the Tom Bradley International Terminal at the Los Angeles International Airport . (AP Photo/Jae C. Hong)
The downside to a strong economy results in higher prices in some areas.
Add in rising oil prices and it results in pushing up the cost of air travel and hotel rates.
Fares are expected to rise 2.6 percent and hotel rates up 3.7 percent, according to an industry forecast published by Reuters.
One thing that could be a variable in the equation is the impact of a trade war.
In some countries, including India, New Zealand, Norway, Germany and Chile, airfares are expected to rise by more than 7 percent, said the annual business travel forecast from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA).
The International Air Transport Association in June forecast passenger yields, a proxy for airfares, would rise by 3.2 percent this year in the first increase since 2011 as a stronger global economy drives growth in demand.
Airline costs, including for fuel and labor, have been rising, leading carriers to attempt to push up fares or add fuel surcharges to maintain margins.
The CWT/GBTA 2019 forecast said the rise in hotel rates would be driven by an increased demand for air travel, which would fuel demand for rooms. Room rates are expected to rise by more than 5 percent in Asia and Europe, by 2.1 percent in North America and to fall by 1.3 percent in Latin America.