SINGAPORE—A strong global economy and rising oil prices are expected to push up the cost of air travel in 2019, with fares seen rising 2.6 percent and hotel rates up 3.7 percent, although there are downside risks from a trade war, according to an industry forecast.
In some countries, including India, New Zealand, Norway, Germany, and Chile, airfares are expected to rise by more than 7 percent, said the annual business travel forecast from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA) released on July 24.
The International Air Transport Association in June forecast passenger yields, a proxy for airfares, would rise by 3.2 percent this year in the first increase since 2011 as a stronger global economy drives growth in demand. CWT/GBTA predicted a 3.5 percent rise in airfares in 2018 in a forecast released last year.
Airline costs, including for fuel and labor, have been rising, leading carriers to attempt to push up fares or add fuel surcharges to maintain margins.
Room rates are expected to rise by more than 5 percent in Asia and Europe, by 2.1 percent in North America and to fall by 1.3 percent in Latin America.
By Jamie Freed