Prediction: Increased Travel, Meeting Costs in 2014
According to Carlson Wagonlit Travel’s newly released 2014 Travel Price Forecast, next year will bring “moderate” price increases worldwide for business travel and meetings.
2014 is looking good for meeting and travel suppliers and, well, a little more expensive for business travelers and meeting planners and attendees. That’s according to Carlson Wagonlit Travel, which released its 2014 Travel Price Forecast earlier this week.
CWT expects meeting suppliers to raise prices worldwide, resulting in increases in daily attendee costs and overall meeting costs. What does all this mean? Well, it could lead to less people attending meetings if associations have to raise registration and other fees. Alternately, associations could also reduce the amount of meetings they have or hold smaller ones if facility fees grow too expensive for larger groups.
Here’s a closer look at CWT’s projection in three key areas: air, hotel, and meetings and events.
CWT predicts the global airline landscape will be “dynamic” in 2014, as airlines align via code share agreements, global alliances, or mergers and acquisitions.
The forecast says the widest variation in airfares will occur in Latin America, while airfares will be “nearly flat in Canada and the United States.” It credits this flatness in the United States (a projected 1.2 percent increase next year) to a highly consolidated and fiercely competitive landscape, stable oil prices, and the “potential reduction in demand from the U.S. government, driven by its sequestration efforts.”
The forecast expects hotels in key business destinations to operate near capacity in 2014, predicting that while some continents will experience the highest rate increases in decades, much of Europe will have declining rates due to ongoing economic uncertainty.
As for North America, CWT predicts “modest hotel rate increases” for buyers, which will be passed on to meeting attendees as a result. One bit of good news: In New York City, which is seeing a small increase in new hotel construction, prices may soften.
Nationwide, CWT says U.S. hotel rates could inflate by up to 4.9 percent in 2014. And while rising hotel rates may be concerning to both meeting planners and attendees, a recent hotel guest satisfaction survey released by J.D. Power showed that satisfaction increased in 2013, despite a 5 percent increase in hotel charges in the past two years.
Meetings and Events
CWT forecasts that meeting and event providers “will be successful in raising prices around the world next year, resulting in across-the-board increases in daily attendee costs for meeting planners.” This may cause meeting planners to either reduce meeting sizes or hold them flat versus 2013.
While CWT predicts the strongest meetings and events growth in Asia Pacific as both group sizes and daily attendee costs increase, in North America, meeting sizes will increase slightly (about 1.5 percent), while daily attendee meeting costs may increase up to 5.5 percent “as meeting planners are forced to pay more for sleeping rooms and food and beverage.” In addition, “demand for meeting space will continue to outpace limited increase in supply, adding to suppliers’ pricing power.”
If CWT’s forecast is on target, how could your association’s meetings be affected? Please share in the comments.