April 23, 2024

Advito report reveals air fare and hotel rate trends

Intercontinental air fares are decreasing compared to last year, according to a report out this week from Advito, the consulting arm of BCD Travel.

The report says the drop is due to a strong recovery of airline capacity, a sluggish economy for some key countries in Asia and Europe and the impact of other high travel costs, such as hotel and car rental, on passenger demand.

Intercontinental economy fares are dropping by up to 15% (see table below), driven by strong capacity growth from Europe to main destinations in North and South America, Middle East and Asia.

According to Advito’s study of fares in late February/early March for departures in April, May and June 2024, intercontinental business fares are resisting. But its report says figures for business class might be misleading because these seats are generally booked much later than economy seats.

Intercontinental business fares from the UK are growing faster compared to Germany and France that are lagging.

Advito’s research found fares from all Asian cities dropped sharply, primarily because of record high price last year and with growing competition from new players restoring strong airline competition.

Fares to China are significantly decreasing due to a “slowdown of economic activity combined with the reinstatement of international airline network”.

Meanwhile, the report says hotel rates are rising significantly in many international markets, “driven by inflation, demand for leisure travel, and hotel internal costs”.

According to STR benchmark data, occupancy levels have increased year-over-year in most regions except North America.

But Advito says rate increases seem to have decelerated through the first quarter of 2024, due to leisure and business travel levelling off.

Revenue per available room (RevPar), as reported by STR, has been record-setting in most markets.

Most countries are seeing drops in the best available rate (BAR) quarter over quarter.

Most markets in Europe are seeing decreases except for Iceland,Norway, Luxembourg, Russia, and Sweden.

The hotel rate insights were based on a comparison of average Flexible Best Available Rate (BAR) in the GDS and OTA for April, May and June.

advito.com

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