Although 2018 was a great year economically, 2019 appears to be where the plateau may begin. The latest projection from the International Monetary Fund for growth is at a rate of 3.9% globally, making it flat from the year prior. Emerging markets will fare a bit better and continue to see a growth rate of 5.1% which is .2% higher than 2018. We project that travel spend will rise 1-3% globally across most of the world with some regions or cities peaking to a higher percentage. However, transactions are up 10% and we expect that trend to level out in 2019.
For the 2019 Global Travel Forecast, we compiled data from the following sources:
- Travel Leaders Group historical and advanced booking data
- ARC transactional data
- Global knowledge and expertise of the travel industry from Travel Leaders Group
- Macroeconomic information provided from International Monetary Fund (IMF) and World Bank
2018 was a very prosperous year for almost everyone; will that continue into 2019? Overall we expect flat to moderate 2% increase on air, car and hotel combined based on existing travel spend for most of the world. (There are areas in emerging markets where there will be double digit increases, which will be highlighted throughout the forecast).
Trends are starting to show a bit of a slowing demand for air travel from the last quarter of 2018 moving into 2019. Airlines have added approximately 7-8% capacity year-over-year for the past two years, which is a massive growth rate. Demand has increased on par with our 2018 prediction of 5%.
Hotels have been reaping the benefits of low supply and high demand for the past several years. Major cities have added a lot of capacity over the last two years which has helped keep rates flat. Travel Managers are taking a different approach on negotiating room nights. Instead of a fixed cost per night, hotels are open to negotiating a discount on BAR, since hotel pricing has become dynamic.
Rental car companies have done a great job of balancing demand with inventory. Rental car companies are seeing a slight resurgence and selling out at peak periods when demand is high. Rental car companies haven’t raised rates in years. As more demand is returning, we are expecting corporate rates to rise 2%. Ride sharing is the number one transportation category expensed and will continue to increase.
Travel Leaders Group, which ranks as one of the North America’s largest travel agency companies, is transforming travel with a commitment to its vacation and business travel clients through a progressive approach toward each unique travel experience. More than 52,000 travel agents worldwide are part of Travel Leaders Group, which has annual sales of more than $20 billion.
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