May 28, 2024

Report charts rise in flight and hotel prices over next two years

Corporates will be faced with higher air, hotel and ground transportation prices over the next two years, according to the latest Global Travel Price Forecast published today by the GBTA and CWT.

A pick-up in demand, capacity constraints, sustainability demands, and increased labour and fuel costs will lead to higher prices globally but, with the exception of ground transportation, business travel prices are unlikely to exceed 2019 pricing over the next two years.  

“Business travel recovery is underway, and it is really great to see people reconnecting and engaging once again, as the world returns to a more traditional pace of life,” said CWT Chief Executive Officer, Michelle McKinney Frymire. 

“While the best-case scenario for 2022 is for further recovery of business travel across all areas, not all markets, nor all categories, will recover at the same pace, so business travel managers will need to understand what to expect as we look at the year ahead.” 

Suzanne Neufang, Chief Executive Officer of GBTA, added: “As we turn toward recovery, insights and data will be critical to enable the business travel industry to navigate what will likely be a dynamic year ahead.

“This forecast is designed to help corporate travel buyers build and budget their 2022 travel programmes through an informed summary of how the global pandemic influenced pricing in 2021, along with a detailed look at macroeconomic factors that will affect pricing in 2022.” 

The forecast is based on anonymised data generated by CWT and GBTA, along with publicly available industry information and econometric and statistical modelling developed by the Avrio Institute.  

It forecasts a 5.9% rise in the global economy 2021, followed by 4.9 % in 2022, spelling growth for business travel.

But it warns that macroeconomic forces, government policy, and Covid protocols will continue to impact future pricing more than ever before.

It predicts that many travellers won’t return immediately, and business travellers may find themselves in a price competition with leisure travellers, who are leading the recovery and are willing to pay higher prices on key city routes and destinations.  

Here’s what the forecast says for the different sectors:

Air travel

After rising 2.6% in 2019 air fares fell 3.1% in 2020 and a further 31% for business travellers, led by a 38% decline in premium class, followed by nearly a 19% decline in economy class tickets across 2021. However, air fares are expected to rise 3.3% in 2022, and 3.4% in 2023. 

Airline capacity remains tight, and is unlikely to return to pre-pandemic levels until 2023, or 2024. As a result, business travellers are competing for limited capacity with leisure travellers. This will continue to exert pressure on airfare prices in 2022, as they move in unison with demand. If demand increases faster than capacity returns, price increases could outpace these forecasted increases. 

Premium fares are expected to start picking-up in 2023 as demand normalizes, while economy fares, especially on domestic routes, will continue to benefit from strong gains in leisure traffic going into 2022.  

Domestic leisure destinations will continue to lead recovery in 2022, and, while urban centers with strong corporate traffic will take longer to recover, higher vaccination levels should strengthen business traveler confidence.  

Higher oil prices increase operating costs, and will continue to put upward pressure on fares as airlines seek to improve profitability metrics, and 2022 corporate travel policies will also be a factor in the recovery of air fare on corporate-heavy rates. 


After rising 3.5% in 2019, hotel prices fell 8.3% in 2020 and an additional 17.7% in 2021, with prices as of Q3 2021 down from 2019 levels by approximately 25%.  

Although hotel prices are expected to rise 13% globally in 2022, followed by a further 10% in 2023, it will take some time for a return to 2019 levels in many markets. As borders open for non-essential travel, occupancy rates will rise, putting upwards pressure on pricing and 2022 will see a push in that direction.  

Upscale hotels should see higher occupancy levels, and higher room rates, as business travel gains momentum. However, with higher global labor and operating costs and supply chain disruptions likely to continue, the firming of hotel pricing to 2019 levels may fluctuate until these factors become more consistent. 

Corporate meetings and events will also help impact hotel pricing, and CWT Meetings and Events anticipates that the bulk of immediate meeting bookings will be small and regional. Virtual and hybrid meetings played a leading role in 2021, while the overall meeting size of live meetings dropped from an average of 42 attendees per meeting in 2019 and 2020, to an average of 24 attendees in 2021.   

Many organisations appear to be choosing smaller regional meetings, as opposed to larger events involving travel at the current time, however, as restrictions lift, and pent-up demand leads to more people travelling for meetings, that looks set to change in 2022.     

Ground transportation 

Global car rental prices fell 2% in 2020 and recovered 1.2% in 2021, and pricing is expected to increase 3.9% in 2022, and an additional 3.0% in 2023.  

The restricted supply of new vehicles, combined with a boost in demand for rental vehicles, will drive higher price rises in the short- to medium-term.  

Providers are looking to update their fleet as a matter of urgency, but with a shortfall in the used car market and issues with global car manufacturing due to shortages of semiconductor computer chips, fleets are unlikely to be fully replenished until 2023. 

The offer of electric vehicles is also going to be pivotal over the next three years, with sustainability a key priority for employers and employees alike. Some providers are already making in-roads towards electrifying their fleet, building their own charging infrastructure, and adding the booking of hybrid and e-vehicles to transfer and limousine services.