Both business and leisure travel across the globe is forecasted to be at 85.5 per cent of 2019 levels this year, according to FCM Consulting’s latest Global Trends Report.
1Q2023 corporate travel demand remained strong despite the mixed economic conditions, with securing options and booking lower prices driving corporate travellers to book online, early.
Domestic booking trends for 1Q2023 versus 1Q2022 saw a 27 per cent rise in online adoption, the advance booking days extended from 17 to 19, and average days away held firm at 2.9. The report also showed that in-person meetings was the leading reason for corporate travel.
On the accommodation side of things, global hotel occupancy for the quarter was 60.5 per cent, only four percentage points below the occupancy levels of 2019.
Stabilisation returning to air travel
After 2022, a year full of significant imbalance of both supply and demand, air travel is predicted to stabilise this year, seeing added capacity in 1H2023 and airfares moderating in 2H2023. Data showing 1Q2023 seat capacity was up 2.1 per cent on 4Q2022 and down 6.8 per cent on 1Q2019.
Early forecasts show air capacity offered in 2023 will be just 2.5 per cent short of 2019 volumes.
Lift off in Asia
The region with the highest seat growth in 1Q2023 vs 4Q2019 was Asia with a 12.2 per cent increase, with most other regions averaging two per cent growth.
The exception to this was Europe which saw an 8.7 per cent decline as the region balanced changes in demand – but the Northern Hemisphere summer will drive demand in 2Q and 3Q2023.
Return of airline seats
The forecast across seats offered from 20 major airlines for a full calendar year reports a 94 per cent return of seats in 2023 versus 2019. Singapore Airlines, Qatar Airways and Qantas Airways have a seat forecast of 97 per cent as travel normalises.
Increase in business class fares
While the global average of international business class fares increased by 18 per cent in the first two months, Asia experienced an increase of 23 per cent. Discounted economic fares increased by 14 per cent internationally while Asia had a 15 per cent increase.
Mumbai to London saw the highest increase of 26 per cent in discounted economy fares while business class fares from Dubai to Shanghai increased by 47 per cent.
Asia demand fuelling robust room rates
1Q2023 saw all six regions surpass 4Q2022 average room rates by four to 26 per cent, with the Middle East rising by 22 per cent, Europe up 19 per cent, Latin America increasing by 12 per cent, Australia/New Zealand up 12 per cent, North America rising four per cent, and a 26 per cent increase in Asia’s room rates.
As China opened borders, the rebound across Asia was significant with an increase of 26 per cent. Room rates in Tokyo averaged at US$294, Singapore at US$269, Seoul US$239 and Hong Kong at US$224, making Tokyo the most expensive city to stay in Asia.
On the accommodation front, there is also a growing demand for one of the most successful traveller offerings in recent years – lifestyle hotels – focused on travellers who want to experience something unique.
Hotels that have lobbies to encourage interaction, offer green initiatives, have slick technology, and wellbeing choices are some ingredients customers are looking for.
“Despite mixed economic conditions, corporate travel demand remained strong in 1Q2023. High global inflation rates continue to put pressure on costs and the travel industry ecosystem has reviewed operating costs, changed pricing, upgraded technology to drive efficiency to reduce underlying costs and removed disruption and risks,” said Bertrand Saillet, managing director of FCM Asia.
“Not only are in-person meetings the leading reason for corporate travel but business travellers are also booking online, early, to secure lower prices. Domestic booking trends for 1Q2023 versus 1Q2022 also saw a 27 per cent increase in online adoption,” added Saillet.
