According to a Global Business Travel Forecast by American Express Global Business Travel, the travel industry can only expect flat to moderate growth across air, hotel and ground transportation in 2017.
This comes as a result of a continued slowdown of the Chinese economy, depressed oil prices, Brexit, growing populist politics, and increased security concerns around the world, all culminating in a higher level of uncertainty which is antithetical to rapid growth.
However, the forecast is predicting that demand for global air travel will remain high as low fuel prices and strong competition amongst airlines is making air travel more affordable and accessible.
Jo Sully, Vice President and General Manager, American Express Global Business Travel, ANZ, said, “Australian airfares are tipped for a slight increase on domestic economy flights, while international business fares will remain flat across 2017.
“While we’re not seeing a major shift in businesses tiering down from business class to economy, we’re noticing an increased focus on travel behaviour. Companies are reviewing travel policies and making changes which encourage employees to book domestic travel over seven days in advance so as to reduce fare rates. Reasons for travel are also being more closely scrutinised with non-essential travel, such as for internal meetings, being reduced. However, sales and business development related travel will remain a priority over 2017.
“In relation to hotels, Australia is expected to be a strong performer in the Asia Pacific region as a weak Australian dollar helps attract international visitors and drive occupancies higher. In hotspots such as Sydney and Melbourne, surging demand is outpacing construction and rates should rise as a result, particularly in the popular summer months. However, the lasting effects of the mining slowdown will continue to deliver lower rates to other Australian cities such as Perth and Brisbane where hotel occupancy and pricing will remain flat throughout 2017.”
