2019 – What will happen to the cost of business travel?

Robust economic growth is likely to push air fares and hotel rates upwards next year, but forecasters dispute how far risks like the US-China trade war could affect the market.
Written on 01.11.2018, 00:00
2019 – What will happen to the cost of business travel?

An unpredictable president is making the USA particularly unpredictable for 2019. The outlook is only likely to become clearer once the consequences of the trade dispute with China are better understood. However, CWT forecasts the euro to appreciate 4.8 per cent against the US dollar, which will make visiting the USA cheaper for European business travellers.

BCD warns that hotel rates will rise steeply in booming business destinations on the West Coast, most notably San Francisco and Seattle.

Five tips for controlling your travel spend in 2019
Beware hidden costs
Suppliers continue to find new ways to increase total cost to their customers without putting up their base price. A good example in 2018 has been the introduction in EU countries by many airlines of a surcharge for payment by corporate card. The withdrawal by Lufthansa of its lowest fares from global distribution systems, which could be followed by other carriers in 2019, is also pushing up processing costs. And watch out for potentially more fuel surcharges too.

Manage your air spend more dynamically
Don’t think only in terms of annual supplier negotiations and quarterly reviews. Monitor fares continuously and take fast action where opportunities arise.

Find alternative cities
Popular cities like Amsterdam and Paris are regularly full and very expensive, so persuade employees to meet elsewhere if travelling on internal business.

Redouble efforts to promote advance purchasing
Airlines are likely to restrict the number of seats available in lower fare classes even more in 2019, which makes early booking more important than ever.

Focus on changing traveller behaviour
As the alternative cities and advance booking examples above show, how you manage traveller behaviour will ultimately affect total travel costs far more than price adjustments by suppliers. Use tools such as policy compliance monitoring to drive your travellers towards booking smarter.

2018 Pricing Forecasts
Air

 

Intercontinental Business

Intercontinental Economy

Regional Business

Regional Economy

North America

1%

0%

1%

1%

Europe

1%

1%

2%

2%

Asia

1%

1%

2%

1%

Latin America

0%

-1%

-1%

-2%

Middle East

0%

 0%

1%

1%

Africa

0%

-1%

1%

0%

Southwest Pacific

0%

 0%

3%

2%

Global

1%

1%

1%

1%

 

Hotel

North America

1-3%

Europe

1-3%

Asia

0-2%

Latin America

1-3%

Middle East

0-2%

Africa

1-3%

Southwest Pacific

1-3%

Global

1-3%

1 Source: 2019 Industry Forecast, BCD Travel

Air

North America

1.8%

Western Europe

4.8%

Eastern Europe

-2.3%

Asia Pacific

3.2%

Latin America

-2.0%

Middle East & Africa

-2.0%

 

Hotel

North America

2.1%

Western Europe

5.6%

Eastern Europe

-1.9%

Asia Pacific

5.1%

Latin America

-1.3%

Middle East & Africa

-1.5%

2 Source: 2019 Global Travel Forecast, Carlson Wagonlit Travel/Global Business Travel Association