Travel TrendsThere's only one way hotel rates and airfares are going – and that’s UP.

Why travel will be more expensive this year

Hotels across Asia enjoy sizzling demand after two years of pandemic lockdown.
Hotels across Asia enjoy sizzling demand after two years of pandemic lockdown. Photo Credit: Adobe Stock/AaronPlayStation

Travellers have been warned that airfares and hotel rates will stay high this year as demand continues to outpace supply.

A huge spike in hotel rates, by as much as 70% in Bangkok, was not sustained in the first two months of 2023 but pundits still predict that there will be few bargains this year as hotels enjoy sizzling demand after two years of pandemic lockdown.

Alan Watts, Hilton’s Asia-Pacific president, told Squawk Box Asia that hotel rates are being fuelled by travel demand that is like “a feast … to offset the famine”.

Along with Bangkok, significant increases have been recorded in Bali, Phuket and Singapore, with Singapore rate rises reaching 40%.

Travel booking company Traveloka told CNBC that rates were rising in places where Chinese travellers, freed of restrictions, were travelling.

Traveloka’s chief strategy officer, Joydeep Chakraborty said company data shows that hotel rate hikes are not limited to the luxury sphere “but are more significant among the high-end hotels”.

Along with hotel rates, airfares are not showing any signs of drifting off their peaks.

Speaking at the recent Aviation Festival Asia in Singapore, Capital A’s chief executive and AirAsia co-founder Tony Fernandes said he believed airlines had been under-pricing their flight services and the post-pandemic demand for air travel was an opportunity to offer more realistic pricing.

“After not having flown for three years, passengers’ value of travel has also increased,” Fernandes said.

“The main obstacle for us has been getting our planes back into active service and bringing about 204 planes back is no easy feat.

“And what was initially predicated on being finished by May of next year, we’ll be able to do by May of this year,” he added.

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