Report: Global hotel rates will climb while air fares remain flat in 2017


CHICAGO, IL – Global air fares should remain flat while global hotel rates are expected to increase around the world by between 0% and 5% in 2017, according to the newly released 2017 Industry Forecast. Despite a modest rise in demand, savings from low fuel prices will sustain airline profitability even with added capacity aboard their fleets.

Global business class fares on average will rise only modestly in 2017, up to 1%, and economy fares will remain flat. However, travel buyers should expect greater variation in fares from region to region. For example, regional business fares will range from flat (in Europe and Latin America) to 3% increases (in Asia and Southwest Pacific). Meanwhile, intercontinental economy class fares should fall slightly everywhere except Europe. Advito expects little change in regional economy class fares with 2% reductions in Latin America.

Hotel rates will increase in all regions in 2017, led by North America, Advito projects. Rates in the U.S. and Canada are expected to climb by 3% to 5% with slightly smaller increases for hotels in Mexico. The Southwest Pacific and the Middle East also will see a rise in hotel rates due to insufficient supply and strong demand. In Europe, a modest economic recovery and little new supply will push up rates by up to 2%.