With India's strong economic growth fueling demand for business travel, airfares, hotel rates and ground transport prices are expected to increase in 2020, according to a report. While airfare is likely to grow by 5 per cent (in Rupees terms) the hotel rates and ground transport prices are likely to climb up by 6.8 per cent and 4.5 per cent (USD terms), respectively, according to the sixth annual Global Travel Forecast published by CWT and GBTA (the Global Business Travel Association) on Wednesday.
“Earlier this year we saw a spike in airfares after Jet Airways ceased its operations in April, so we're already at a high base in 2019," Business-to-Business-for-Employees travel management platform CWT, India, CEO Vishal Sinha said quoting the Forecast. He said, with other airlines adding capacity to fill the vacuum, fares have begun to normalise and it is likely to continue next year. "However, if the rupee weakens against the dollar, Indian carriers could be faced with bigger fuel bills and we may see that being passed on to travellers," he added. Hotel rates are also expected to rise, as the demand for rooms outpaces supply, especially in secondary cities like Chandigarh, Jaipur and Ahmedabad, he opined.
"At the same time, the commercialisation of mid-tier properties by players like Oyo are also pushing prices upwards," Sinha added. Prices in the global travel industry are likely to slow in 2020, with flights rising a modest 1.2 per cent, hotels rising only 1.3 per cent, and rental car rates up 1 per cent (in USD terms), according to the annual Global Travel Forecast.
While the global economy is doing well overall and expected to grow a solid 3.6 per cent in 2020 a raft of uncertainties are set to put a damper on pricing, the report added. "The risks and ambiguity have increased over the past few months not least the threat of escalating trade wars, the impact of Brexit, possible oil supply shocks, and the growing likelihood of recession," CWT's President and CEO Kurt Ekert added.