This article originally appeared here.
The American Express Global Business Travel Forecast 2016 (the “Forecast”), predicts air, hotel and ground transportation prices will see modest gains in 2016, as a slowly-improving global economy and stronger demand outpace increases in supply.
Heading into 2016, airfare prices across the Asia Pacific region are expected to show moderate growth across both business and economy classes. Domestic economy fares are expected to see the strongest fare hikes within the region, despite competition from high-speed rail offerings in China and Japan. Additionally, China will also show a mild uptick in fares as demand, especially from the burgeoning middle class, keeps pace with capacity and carriers expand their long-haul networks. Fares should remain relatively stable in Singapore against a backdrop of increased competition and limited demand stemming from a slowing economy and tightening labour market.
“Broadly speaking, we are expecting modest increases in most airfare and hotel rate categories across Asia Pacific, reflecting a slight uptick in business confidence compared with this time last year”, said David Reimer, managing director, American Express Global Business Travel, Asia Pacific.
“While some countries around Asia are experiencing slower rates of economic growth than previous years – most notably China – companies continue to look abroad for opportunities and the demand for international business travel remains solid”.
Mid- and upper-range hotels in Asia Pacific are likely to experience moderate growth in 2016, although this varies significantly by country. While the anti-corruption campaign for government officials still impacts luxury hotels across China, the country continues to enjoy strong demand reflected in higher average daily rates and occupancy numbers. Favorable exchange rates and limited inventory is fueling substantial rate hikes in Sydney and Tokyo, while the end of the mining boom is having the opposite effect in the western half of Australia.
With the Singapore dollar gaining against the currencies of some of its largest tourism bases, including Japan, Thailand, Malaysia and Indonesia, corporate demand has dampened and tourist arrivals have fallen. These factors, paired with strong competition among hotels, have all contributed to a reduction in the average daily rate.