FCM Consulting's recent Global Trends Report for Q2 2023 reveals a
dual narrative: one featuring heightened travel demand in the Northern
Hemisphere's summer, and the other portraying a world levelling off in
activity. While business trips are on the rise and travel patterns are
stabilising, disruptions stemming from extreme weather and airport
staffing shortages persist.
Even as airfares and hotel room rates maintain their elevated status
in Asia, businesses can navigate these challenges with strategic
guidance from their travel management consultants. Bertrand Saillet, FCM
Asia's Managing Director, emphasised the importance of advanced
planning and leveraging technology to optimise travel budgets.
Domestic airfare surge
Notably, domestic air travel demand remains robust across key
markets. China's demand is a mere 1% lower than in 2019, while Japan has
experienced a notable 20% surge and India a 13% increase. Competition
among airlines, staffing capabilities, economic dynamics, and supply and
demand dynamics are contributing factors.
Resilient airline seat projections
Global domestic flight capacities have exceeded 2019 levels,
projected to surpass them by an additional 4.1%. The Asia Pacific region
reflects a 6.9% uptick in domestic seats, yet lags by -22.5% concerning
Forecasts across 20 major airlines reveal a substantial 93% return of
seats in 2023 compared to 2019. Noteworthy leaders include China
Eastern at 103%, followed by LATAM and United Airlines at 102%, American
Airlines at 99%, and Qantas and Qatar Airways at 98%.
Business class fares and hotel rates
Business class fares witnessed the most significant ascent in the
Middle East, soaring by 29%, trailed by Australia and New Zealand at
27%, and Asia at 19%. On specific routes, flights from Shanghai Hongqiao
International Airport to Singapore experienced a remarkable 37%
escalation, while Mumbai to London and Shanghai Pudong International
Airport to Singapore saw a 20% increase.
Meanwhile, hotel room demand in Asia remains robust, with Tokyo
retaining its position as the priciest city at an average of $286 per
night. Singapore follows closely at $260 per night. Notably, Hong Kong
now ranks as the third most expensive in the region, surpassing Seoul
due to China's border reopening.
In China, hotel rates have seen substantial growth, with Beijing up
by 12% to $175 per night compared to Q1-2023. Hong Kong rose by 10% to
$246, and Shanghai saw a 5% increase, reaching $140 per night.
The global hotel occupancy rate for YTD June 2023 stood at 63.3%,
representing a 96% recovery to 2019 levels. Within Asia, Mumbai led with
101%, followed by New Delhi at 97%, Shanghai at 95%, and Beijing at 93%