Travel costs in 2024 should increase year-on-year but not at the “torrid” pace seen in the previous two years, according to Altour’s 2024 Industry Forecast.
Airline, hotel and car rental rates globally are all “stabilising” this year as leisure travel is returning to the levels seen prior to the pandemic, according to travel management company Altour. In addition, capacity across travel segments is beginning to meet or exceed demand.
For air travel, Altour projects that transatlantic airfares between the US and Europe will increase by 2 to 5 per cent this year. Meanwhile domestic US airfares are predicted to go up by 2-4 per cent year-on-year.
“When it comes to airlines, there are already signs that capacity and demand are equalling out, which should lead to a small increase in airfares, or even a decline in some parts of the world,” added Altour in its report.
“Some airfares could decrease on a year-on-year basis, driven by the decline in ticket prices in the Asia-Pacific region from 2023 when there was strong demand and limited flight capacity.”
Similarly, Altour predicts an overall increase in 2024 average daily hotel rates of 2 per cent to 5 per cent year-on-year, but the TMC pointed out there would be “large fluctuations” among hotel types and markets around the world.
Cities serving a combination of business, leisure and group customers, including Chicago, London, Los Angeles, New York and Paris, are projected to have hotel price increases above that average, particularly among higher-tier properties.
Meanwhile lower-tier properties are becoming more dependent on corporate business as the leisure travel boom subsides and will have limited rate increases. Altour said its team has negotiated rate reductions of up to 10 per cent with some hotels in this tier.
Average daily car rental rates are projected to increase 3 to 4 per cent in 2024, according to the forecast. Altour said that while supply chain issues have improved for car rental companies, high labour costs, vehicle acquisition prices and inflation are still driving up rates.