Corporate TravelFCM Consulting's Q2 2023 report underscores strong domestic air travel demand, business class fare surges, and resilient hotel occupancy.

Asia's airfare and hotel rates persist

Hotel room demand remains strong, with Tokyo and Singapore topping costs.
Hotel room demand remains strong, with Tokyo and Singapore topping costs. Photo Credit: Adobe Stock/f11photo

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 international seats.

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% occupancy.

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