2019 Business Travel Outlook - OVBTA · • 5th annual GBTA Global Travel Forecast, in partnership...
Transcript of 2019 Business Travel Outlook - OVBTA · • 5th annual GBTA Global Travel Forecast, in partnership...
© 2018 GBTA. All rights reserved.
2019 Business Travel OutlookTravel Prices and the Trends That Will Shape Them
Overview & Methodology• 5th annual GBTA Global Travel Forecast, in partnership with the Carlson Family
Foundation
• Projects air, hotel, and car rental prices for 2019
• 28 countries and 10 U.S. cities
• All projections shown are in local currencies
• Forecasts provided by CWT Solutions Group
• Data analysis conducted by Rockport Analytics
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So, What’s Changed? A Whole Lot…
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Curveball #1: Trade Tensions Heat Up as China Slows Down
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In 2016, China Overtook the U.S. as the World’s Top Business Travel Market…
Source: GBTA BTI™ Outlook: Annual Report and Global Forecast, August 2018
4 $51 3 $72 +1Germany Canada 11 $22 11 $25 --
Japan 3 $65 4 $64 -1 Australia 12 $21 12 $23 --
U.K. 5 $40 5 $50 -- Spain 15 $18 13 $22 +2
France 6 $35 6 $40 -- Netherlands 14 $18 14 $19 --
India 10 $22 7 $37 +3 Russia 13 $20 15 $19 -2
Rank Change
2012Rank $bil
2017Rank$bil
Country Country2012
Rank $bil
2017 Rank ChangeRank$bil
U.S. 1 $262 2 $292 -1 9 $30 10 $31 -1Brazil
China 2 $196 1 $347 +1 7 $32 9 $34 -2Italy
S. Korea Indonesia8 $30 8 $36 -- 16 $15 16 $17 --
Curveball #2: Getting Ready a “Hard” Brexit
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Curveball #3: The Government “Re-opens”
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Air Prices
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6 Trends Shaping Air Prices in 2019 and Beyond
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1) “Excuse me, is that seat taken?”
2) Oil’s wild ride
3) Airlines focus on the “premium” traveler
4) Low-cost options on the rise
5) Airfares “unbundle”
6) Airfares “rebundle?”
Trend #1: “Excuse me, is that seat taken?”
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583630 657 658 679 652 618 630 638 642 646 663 696 720 742
8.0%
4.4%
0.2%
3.2%
-4.0%
-5.2%
1.9% 1.4%
0.6% 0.5%
2.7%
5.0% 3.4%3.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
0
100
200
300
400
500
600
700
800
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. Domestic Passenger Volume
Annual passengers (millions) Annual % change
3 years of solid passenger growth
Source: U.S. Bureau of Transportation Statistics (https://www.bts.gov/content/annual-passengers-all-us-scheduled-airline-flights-domestic-international-and-foreign-1)
How Can More Passengers Fly?
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Full planes?
More flights?
Trend #1: “Excuse me, is that seat taken?”
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72.7% 74.5% 77.2% 79.1% 79.9% 79.7% 81.1% 82.2% 82.9% 83.4% 83.5% 84.5% 85.0% 84.6% 84.6%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. Domestic Load Factor (passenger miles/available seat miles)
Source: U.S. Bureau of Transportation Statistics (https://www.transtats.bts.gov/Data_Elements.aspx?Data=5)
Trend #1: “Excuse me, is that seat taken?”
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680731 740 729 744 715
667 675 681 684 693 705 743 781 8097.5%
1.2%
-1.5%
2.1%
-3.9%
-6.7%
1.2% 0.9%
0.4%1.3% 1.7%
5.4% 5.1%
3.6%
-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%10.0%
0100200300400500600700800900
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
U.S. Domestic Available Seat Miles
Available seat miles (billions) Annual % change
3 years of solid capacity growth
Source: U.S. Bureau of Transportation Statistics (https://www.transtats.bts.gov/Data_Elements.aspx?Data=4)
Trend #2: Oil’s wild ride
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In 2018…
Airlines spent $180 billion on fuel globally
Fuel represented about 23.5% of airline operating costs
Source: IATA (https://www.iata.org/pressroom/facts_figures/fact_sheets/Documents/fact-sheet-fuel.pdf)
Trend #2: Oil’s wild ride
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Price of WTI (Nymex) Crude
Source: Nasdaq (https://www.nasdaq.com/markets/crude-oil.aspx?timeframe=2y)
Major decline in Fall of 2018
Trend #3: Airlines focus on the “premium traveler”
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According to IATA…
5% of air passengers purchased premium seats in the first 7 months of 2018
However, these fares represented 30% of passenger revenue over this period
Source: Wall Street Journal (https://www.wsj.com/articles/united-delta-climb-on-business-class-demand-1539803503)
Trend #3: Airlines focus on the “premium traveler”
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First class
Business class
Premium economy12%
9%
40%
Never
When Do Policies Allow…?-survey of U.S.-based Travel Managers
30%
47%
46%
41%
42%
14%
17%
Occasionally Sometimes Always
Source: GBTA, Benchmark Your Air Travel Policy, 2018
Trend #4: Low-cost options on the rise
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18.0% 17.8%16.8%
15.0%
5.7% 5.5%3.8%
2.7% 2.7%1.6%
10.4%
AmericanAirlines
SouthwestAirlines
DeltaAirlines
UnitedAirlines
AlaskaAirlines
JetBlueAirlines
SpiritAirlines
FrontierAirlines
SkyWestAirlines
HawaiianAirlines
Other
U.S. Domestic Market Share (October 2017-September 2018)
29.8% low-cost U.S. carriers
Source: U.S. Bureau of Transportation Statistics (https://www.transtats.bts.gov/)
Trend #4: Low-cost options on the rise
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63% 79% of travel programs configure their booking tool to hide basic economy when travelers aren’t authorized
of U.S. Travel Managers say their company “never allows” basic economy
Do U.S. Travel Programs Allow Basic Economy?
Source: GBTA, Benchmark Your Air Travel Policy, 2018
Trend #5: Air travel “unbundles”
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29%
16%
16%
Never
25%
22%
16%
22%
24%
15%
25%
38%
52%
Occasionally Sometimes Always
Inflight F&B
Inflight Wi-Fi
Seat selection
6F
Source: GBTA, Benchmark Your Air Travel Policy, 2018
When Are Travelers Allowed to Reimburse Add-ons?
Trend #5: Air travel “unbundles”
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74%
54%
49%
Never
19%
27%
9%
5%
13%
12%
6%
30%
Occasionally Sometimes Always
Airport lounge access
Early boarding
Status upgrades
Elite
Source: GBTA, Benchmark Your Air Travel Policy, 2018
When Are Travelers Allowed to Reimburse Add-ons? (Cont.)
Trend #6: Air travel “rebundles?”
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Air Prices in 2019
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Source: GBTA, 2019 Global Travel Forecast, 2018
1.9%1.7% 1.6%
2.2%
2.9% 2.8%
1.9%
Global North America Western Europe Asia Pacific Latin America Middle East andAfrica
Eastern Europe
Air Price Forecast-by region in local currencies
Air Prices in 2019
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1.7%1.4%
1.1%
1.9%
3.3%
Total Economydomestic
Economyintercontinental
Businessdomestic
Businessintercontinental
U.S. Air Price Forecast-by fare class in $USD
Source: GBTA, 2019 Global Travel Forecast, 2018
Hotel Prices
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4 Trends Shaping Hotel Prices in 2019 and Beyond
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1) Supply chases demand
2) The big get bigger
3) Is “leakage” growing?
4) Hotel “content” comes to the fore
Trend #1: Supply chases demand
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Trend #2: The big get bigger
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Trend #3: Is “leakage” growing?
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15%
37%
Air Hotel
Average Percentage of Bookings Made Outside of Corporate Channels
Source: GBTA, Lost in Translation: Changing Landscape, Familiar Challenges, 2018
Trend #4: Hotel “content” comes to the fore
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84%
92%
95%
Non-negotiated rates
TMC's negotiated rates
Own negotiated rates
Which Rates Do Travel Programs Display Through Corporate Channels?-survey of U.S.-based Travel Managers
Source: GBTA, Hotel Booking: Content and Policies, 2019
Trend #4: Hotel “content” comes to the fore
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53%
23% 21%
5%
Our own negotiatedrates
Our TMC'snegotiated rates
Non-negotiatedrates
Other
Average percentage of bookings made through corporatechannels
Source: GBTA, Hotel Booking: Content and Policies, 2019Note: total does not add to 100% because of a data cleaning decision
Hotel Prices in 2019
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Source: GBTA, 2019 Global Travel Forecast, 2018
3.0% 2.8%2.4%
4.1%3.7%
3.2%
2.3%
Global North America Western Europe Asia Pacific Latin America Middle East andAfrica
Eastern Europe
Hotel Price Forecast-by region in local currencies
Hotel Prices in 2019
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2.7% 2.6%2.8%
Total Midscale Upscale
U.S. Hotel Price Forecast-by chain scale in $USD
Source: GBTA, 2019 Global Travel Forecast, 2018
Rental Car Prices
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Rental Car Prices in 2019
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0.7%
1.2%
0.3%
Total Midsize Full Size
U.S. Rental Car Price Forecast-by car size in $USD
Source: GBTA, 2019 Global Travel Forecast, 2018
© 2018 GBTA. All rights reserved.
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