Global travel and meeting prices are expected to continue their steep climb in 2022 and 2023, according to the 2023 Global Business Travel Forecast, released today by travel management company CWT and the Global Business Travel Association. The report, which is updated annually in advance of the GBTA Convention, is based on data from both CWT and GBTA, public industry information, and economic modeling developed by the Avrio Institute.
Travel price growth will be primarily driven by rising fuel prices and raw material costs, as well as labor shortages, according to the report.
"Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt," said CWT CEO Patrick Andersen. The above factors are all driving increased costs, Andersen added, resulting in prices that should be for the most part on par with 2019.
Meeting Costs Continue to Soar
As meeting and event planners know all too well, prices already have increased across the globe — thanks to pent-up demand, the need to meet again in-person and an uncertain economic outlook. The forecast estimates cost per attendee will be a whopping 25 percent higher this year than it was in 2019, followed by additional growth of 7 percent in 2023.
Demand for meeting space is high, with corporate meetings competing for space with the wide variety of events that have been rescheduled since 2020. Additionally, the report notes that many companies that have given up office space over the past two years now must book meeting space in order to bring employees together.
The forecast also calls out shorter lead times as a factor driving up costs, with the average lead time now just one to three months as opposed to six to 12. The uncertainty driving the compressed timing is particularly prevalent in the Asia Pacific region, according to the report.
Groups and Business Travelers Drive Up High Hotel Rates
Strong leisure travel demand has been driving record-high average daily rates over the past year, and the report indicates that transient and group business travel are likely to drive those prices higher. The report expects global rates to rise by 18.5 percent this year vs. 2021, and another 8.2 percent in 2023. Rates already have soared by 22 percent in North America and 31.8 percent across Europe, the Middle East and Africa, eclipsing 2019 prices. Globally, hotel rates should pass 2019 levels sometime in 2023, according to the forecast.
Rising Premium Class and International Bookings Push Airfare Higher
Airfare is predicted to rise by a whopping 48.5 percent in 2022, but given the steep declines of the past two years prices aren't forecast to surpass prepandemic fares until 2023, when another 8.4 percent hike is predicted.
Rising demand, more expensive jet fuel, and a rise in percentage of premium class and international tickets will all contribute to the increase. Through the first half of 2022, premium class seats account for 6.2 percent of all tickets sold, which is steadily climbing back to the 7 percent mark reached in 2019.
The full report can be viewed and/or downloaded from the CWT website.