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Business Travel 2018: The State of Play

Growth is expected in the coming year but, like the rest of the travel industry, business travel remains in a state of perpetual transition

There is going to be more money around this year, so on the face of it business travel should pick up speed. The Global Business Travel Association (GBTA) thinks it will, after taking a look at global economic prospects, and is forecasting business travel spending to grow by 6.1% against a likely 5.1% in 2017.

Rising consumer and business confidence should encourage businesses to hire more employees, it reckons, and to send them on trips. In turn, this rising demand will allow the industry to push up prices, with airfares forecast to rise by 3.5% and hotel prices by 3.7%.

Business travel spending is expected to grow by 6.1% against a likely 5.1% in 2017

Source: GBTA

Some analysts on Wall Street, however, see downsides in that and have downgraded the shares of Expedia and Priceline on the grounds that increased business travel would limit room supply. Rob Sanderson at brokers MKM wrote in a note that Expedia’s room-night growth in particular has disappointed: “We think this is related mostly to supply tightness, which is crowding out online travel agency customers and may be driving them into alternative accommodation more and more.”

However, he has just upgraded shares in Hyatt, given the company’s heavy exposure to corporate travel, and already has ‘buy’ notes out on Hilton and Marriott.

Black clouds

Looming on the horizon is one very black cloud – prospects of a possibly even worse Atlantic hurricane season than last year. The extraordinary Atlantic disaster was one of the biggest shocks to the industry, $188bn of damage in all caused by disrupted conference, meeting and event plans as well as holidays. The Caribbean is one of the most popular business travel destinations. 

The extraordinary Atlantic disaster was one of the biggest shocks to the industry

“The Atlantic Ocean may be roiling even more strongly next year, if the La Niña that looks likely to arrive in the coming months persists into next summer,” wrote the New Scientista few weeks ago, after talking to the National Ocean and Atmospheric Administration’s Climate Prediction Center in Washington DC.

Others predicting a stormy time include a London-based consortium of experts who work with the Lloyd’s Insurance Market, Tropical Storm Risk, and these guys are saying that the “2018 hurricane season will be another above average one”. 

Read more at EyeForTravel

Posted by on January 9, 2018.

Categories: Trends

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