Want to know what to expect for your 2020 travelling experience? CWT’s Global Travel Forecast is out to help set expectations of what’s to come. From blurring hotel lines to the rising cost of flights and a ‘people first’ ethos, the coming year has a lot in store for us. While the future is never certain, current political and social issues have made predictions for travel trends even more volatile. However, based on data and analysis from Rockport Analytics and CWT Solutions Group and in collaboration with Global Business Travel Association, CWT has begun to make predictions about upcoming changes in the world of corporate travel. Here is what you should prepare for in the year ahead.
An Uncertain Future
The turbulent political scene that has dominated recent years, namely U.S.-China trade wars and Brexit, as well as one of the biggest global action problems of all time, climate change, make the future particularly uncertain. This uncertainty is predicted to weaken global expansion and lead to a slower growth trajectory, according to the report. Uncertainty is measured in the report by the Global Uncertainty Index, a barometer of unpredictability in 20 countries, based on the frequency that news outlets cite “uncertain” or “uncertainty” in relation to economic policy. The current trade-wars are particularly relevant as the report claims there is a “solid link between business travel and trade.” Therefore, negative trade impacts will extend to the travel industry.
In the United States, GDP growth is set to slow to 2.1 percent in 2019 (down from 3 percent in 2018) and decease further to 2 percent and 1.8 percent in 2020 and 2021, respectively. An economic slowdown could affect businesses and travel programs so CWT suggests you plan ahead to ride out any downturns in revenue next year. (Credit: CWT Global Travel Forecast)
There has been, according to the report, a shift toward “putting traveler experiences and the employee at the core of the travel program and away from outdated policies and tools that focus on compliance.” It seems that many companies are practicing a people-first policy to inspire loyalty and hard work in employees and customers. Additionally, increasing amounts of data on travel preferences are available as travelers can easily, and are willing to, share their opinions through apps and travel industry staff; allowing the creation of an experience tailored to travelers needs and preferences.
Blurred lines in the hotel industry are set to continue in 2020. CWT reported that with the rise of untraditional accommodation options (think AirBnB) and the millennial workforce, “traditional demarcations of accommodation will continue to blur.” With AirBnB for Work expanding to Asia, Marriott’s new home rentals, and the millennial preference for boutique hotels, the traditional cookie-cutter luxury chain brands are facing new challenges. Another new trend to watch out for in accommodations is the addition of extra fees. For example, many hotels are implementing stricter cancellation policies that refuse refunds if cancelled less than 72 hours in advance, as opposed to the standard 24 hours. This is to make up revenue lost due to inflation and slow increase in room rates.
Additionally, as hotels continue to be built, demand is set to match supply soon, which will lead to a slower increase in average daily rates and help inflated rates return to normal (yay!).
Rental car rates are set to rise by 1 percent globally next year. That is in addition to the continued use of Uber and Lyft by business travelers in urban areas. While ride-sharing apps might appear to be competition for car rental companies, they are in fact working together to help both sectors thrive as rental companies hire Uber or Lyft drivers to shuttle customers between rental lots and airports. This speaks to a collaboration that is expected to spread as Transportation Network Companies (like Uber and Lyft) recognize the importance of partnerships.
Air prices are expected to rise by 2.3 percent in North America in 2020, this growth represents the underlying strong economies in the U.S. and Canada. This rise is also to make up costs that airlines are expected to pay as unions continue to negotiate with carriers for pilots and maintenance contracts, many of which are up for renewal in 2020.
(credit: CWT’s Global Travel Forecast)
In Canada, one airline is trying to recover costs after a private equity firm, Onex, paid premium prices for Westjet in a $5 billion deal this year. Onex doubled the share price of what the market was asking, which was, according to the report, a first in the industry. What does this mean for you in 2020? Tickets to Canada could be higher next year, as much as 3.2 percent higher.
Cities where demand has historically hugely out-stripped supply, such as tech-focused San Francisco, San Jose, Seattle and Vancouver, have absurdly high hotel room rates. A slowing of the tech industry, as well as trends for business travelers to stay farther afield from city centers, should bring prices down and open more room for negotiation with hotels and businesses.
Technology will continue to increase speed and efficiency for the business traveler. Everything from trip disruption technology, biometrics at borders and automated check in (and out) will continue to make the business travel experience more seamless and efficient than ever.
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