Business Travelers will Face Higher Air and Hotel Costs in 2015

As the United Kingdom’s economy continues to improve prices for hotels and business class flights are expected to rise next year, according to a study by Carlson Wagonlit Travel and the GBTA.

Overall business travel spending in the UK is set to rise by 5.1% in 2015. This is compared to an estimated rise of 4.4% during this year, according to the 2015 Global Travel Price Outlook.


Hotels are likely to see the highest rise in rates in the UK with an overall price increase of 3.5% next year, according to the study, with London prices likely to go up by an even higher percentage due to “room shortages”.

This compares to an expected global increase in hotel prices of 2.6% in 2015 leading to an average daily rate of $179 per room.

Hotels are likely to be in a “better negotiating position”, in 2015, than they have been for seve ral years due to “stronger demand, investor interest and favourable capital costs” said CWT and GBTA.

“This improved outlook could lead to greater pressure on negotiated rates for travel managers and buyers,” said the report.

Business class airfares meanwhile are set to rise by 1% in the UK next year due to “price competition” from no-frills airlines including Easyjet and Ryanair. This increase is significantly lower than the forecast global rise in airfares of 2.2% next year to an average ticket price of $771.

CWT and GBTA are forecasting an overall 8.6% global increase in spending in 2015, up from an estimated rise of 6.9% this year, fuelled by higher demand from emerging markets such as China, India and Brazil and the improved economic growth in developed countries.

“The study reveals that travel managers expect price increases next year across the board on travel categories including airfar es, hotel room rates and rental car rates,” said Joseph Bates, vice president of research for the GBTA Foundation.

“Risks to the forecast including the escalating Ukrainian crisis, declining European inflation, burgeoning debt in China and oil price shocks could potentially have a negative influence on travel demand and pricing however, so travel managers are advised to consider contingencies for these risks in their planning.”