May 28, 2024

FCM Consulting: Hotel and flight prices stabilising as capacity returns

Global aviation will be back to 96% of pre-pandemic levels in 2023, according to FCM Consulting’s latest Global Quarterly Trend Report.

The report showed that Q4-2022 seat capacity saw an 18% rise on Q4-2021 but was still 13% down on Q4-2019.

It also highlighted a minor slowdown in seat growth in the last quarter of 2022, with the 2022 full-seat capacity up 31% on 2021 but still down 17% on 2019.

Airfares are staying high with global international business class fares in 2022 on average 15% higher than 2019.

Discount economy class fares were on average 12% higher in 2022 than they were in 2019.

“Predicting full-year 2023 seat capacity is a very long range forecast, nonetheless, airline schedules are offering just 4% less seats than in 2019. Q2-2023 heading into Northern Hemisphere summer shows optimistic travel signals,” said FCM Consulting General Manager Felicity Burke.

“Pent-up travel demand into and out of China is forecast to last three to five months, with longer-term travel patterns likely to return 2024 pending economies.

“Since our last report in October 2022, the top 20 global corporate airlines have revised their forward schedules down 3%. The current global forecast across these airlines is an average of 10% seat growth from H2-2022 to H1-2023.”

Meanwhile, hotel rates are stabilising in the UK and across Europe, with average room rates falling by 14% between the third and fourth quarter of 2022 and by 7% in London and Dublin.

FCM UK Managing Director, Andy Hegley, said: “This is very encouraging for business travellers and helping to drive recovery in this market.

“Combined with the ramp up of international capacity, means we should also start to see airfares closing in on pre-pandemic rates in Q1 2023 period.”