Carlson Wagonlit Travel’s(CWT) has released its 2014 Travel Price Forecast which states that 2014 will bring “moderate” price increases worldwide for business travel and meetings.
A spokesperson for CWT stated that moderate price increases are expected worldwide next year. However, prices in Europe are likely to decrease because of the continued economic uncertainty in the region, while emerging markets could experience far higher increases in 2014.
As far as the MICE industry (Meetings, Incentives, Conference and Events), 2014 is looking good for meeting and travel suppliers with higher cost being carried by the business travelers, meeting planners and conference attendees. The CWT forecast suggests that meeting suppliers will be raising prices worldwide, resulting in increases in daily attendee costs and overall meeting costs. If participants remain budget minded, it follows that there may be less people attending meetings if organisers have to raise registration and other fees, or lead to smaller less frequent meetings make it too expensive for larger groups.
The CWT report covers air; hotel; ground; and meetings and events. The report predicts the global airline landscape will be changeable during 2014, as airlines consolidate through code share agreements, global alliances, or mergers and acquisitions. However, it suggests that the United States may be relatively stable compared to other regions – partly due to an already highly consolidated, fiercely competitive landscape, stable oil prices, and the “potential reduction in demand from the U.S. government” driven by budget cutting efforts.
The Asia-Pacific (APAC) region could see airfare rises of about 4%, as China’s growing middle class drive demand for leisure travel, putting pressure on capacity but demand for business travel remains steady. This could result in prices jumping nearly 7% in China throughout 2014. The forecast expects hotels in key business destinations to operate close to capacity in 2014 except for much of Europe, which will have declining rates due to ongoing economic uncertainty.
CWT predicts “modest hotel rate increases” for buyers to be passed on to meeting attendees. The suggestion is for an estimated 4.9% rise in U.S. hotel rates in 2014. Rising hotel rates may mean some adjustments by meeting planners and attendees, a recent hotel guest satisfaction survey indicated that the hotel industry has been responding with increased “value and satisfaction” for clients.
The report suggests that meeting and event planners will be raising prices around the world resulting in across-the-board increases in daily attendee costs for meeting planners. This may cause meeting planners to either reduce meeting sizes or hold attendee numbers in check.
CWT predicts the strongest meetings and events growth in Asia Pacific as both group sizes and daily attendee costs increase around the globe.In APAC, a booming M&E industry will see group size increase 3-5%, while daily costs per attendee rise 4-5%. However in North America, meeting sizes will increase slightly (about 1.5 percent), while daily attendee meeting costs may increase up to 5.5% as meeting planners are forced to pay more for hotel rooms and food and beverage. In addition it is likely that demand for meeting space will continue to outpace limited increase in supply, adding to suppliers’ pricing models.