Travel TrendsTravellers can expect an increase by 8.4% in airfares, 8.2% in hotel rates and 6.8% in car rental charges: CWT.

Here's why travel prices are still going up in 2023

The 2023 Global Business Travel Forecast attributes rising costs to labour shortages and rising costs of raw materials.
The 2023 Global Business Travel Forecast attributes rising costs to labour shortages and rising costs of raw materials. Photo Credit: GettyImages/Evgen_Prozhyrko

Throughout 2022, air fares are expected to rise by 48.5%, hotel rates by 18.5%, and car rental charges by 7.3%. But it doesn’t end there. The Global Business Travel Association and CWT further predicts that travellers are set to encounter an additional 8.4%, 8.2% and 6.8% increase for flights, hotels and car rentals respectively in 2023.

According to the 2023 Annual Global Business Travel Forecast, the year-on-year changes in travel pricing are as follows:

  2020 (actual) 2021 (actual) 2022 (forecast) 2023 (forecast)
 Air fares 12% 26% 48.5% 8.45%
 Ground transportation 4.9% 5.1% 7.3% 6.8%
 Hotel rates 13.3% 9.5% 18.5% 8.2%

“Labour shortages across the travel and hospitality industry, rising raw material prices, and greater awareness for responsible travel are all having an impact on services, but predicted pricing is, on the whole, on par with 2019,” said CWT CEO Patrick Andersen.

Rising fuel prices, labour shortages, and inflationary pressures in raw material costs are the primary drivers of the price surge, according to the 2023 Global Business Travel Forecast.

For air travel, the increasing demand for travel now that borders have reopened, alongside the rising costs of jet fuel which has more than doubled in some markets to over US$160 per barrel, according to S&P Global, is causing a spill over to passenger ticket prices.

Hotel rates have accelerated across the world, including a 22% rise in North America, and a forecast of 31.8% across Europe, the Middle East & Africa, mostly due to high demand for rooms despite the continued capacity constraints.

Accommodation costs had started increasing in 2021 driven by the beginning of the travel rebound. With business travel, whether in groups or individuals, improving by the day, there’s further pressure on average daily hotel rates. 

Car rental agencies have yet to recover from reducing its fleet sizes from the pandemic, resulting in a shortage of vehicles in the face of high demand. Corporate travel managers are increasingly looking at electric vehicles to combat both the rising prices of fuel and carbon emissions.

When it comes to meetings and events, the pent-up demand has resulted in an increase of cost-per-attendee. Participants attending events in 2022 are expected to fork out around 25% more in costs than in 2019, and it's forecast to rise a further 7% in 2023.

“Demand for business travel and meetings is back with a vengeance, of that there is absolutely no doubt,” said CWT CEO Patrick Andersen.

Beside the pent-up demand for meetings and events, the event sector is also going head to head with other types of events that were cancelled during the pandemic. Shorter lead times for events are also contributing to the rise in costs.

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