It’s that time of year again, when travel pundits and prognosticators do their best to predict what may or may not happen in the coming year. Here’s what I see on the horizon for frequent travellers in 2012.
Apart from uncertainty
about the eurozone, the global economy is slowly improving, meaning individuals
and companies are likely to increase their budgets for both business and
leisure travel. But just like improvements in the global economy, any expansion
in travel budgets is going to be very slow.
demand for travel in 2012 will mean higher prices for transportation, fuel,
lodging and food, with the biggest jumps in fast-growing regions such as Asia, India and South America. Business travel to
and from Japan should continue to improve, but
leisure travel to this country will stay slow -- forcing down rates for what
has long been one of the most expensive countries in the world.
Europe’s economic woes, demand and prices for travel in the region could flatten,
but this will not be by much. European companies are likely to crack down on
extravagant spending by cutting back or eliminating business class air travel,
enforcing the use of midrange hotels and asking travellers take trips by car or
train instead of flying. In the unlikely event Greece reverts back to the drachma, prices could take a tumble there,
opening up opportunities for bargain-focussed vacationers.
In the US,
hotel prices will continue to increase in big coastal cities such as New York,
Boston, Washington DC, Los Angeles and San Francisco where business is brisk,
but will remain mostly flat in the heartland where economic recovery is slower.
Airfares in the US are currently 10 to 20% higher than two years ago, and look
to remain high as airlines continue to reduce capacity, consolidate, or, like bankrupt
American Airlines, shrink their way to profitability.
Here’s a round
up of what to expect regarding…
The price of oil has decreased to around $100 per barrel (down from a high of about
$120 this past April), which is helping keep a lid on any major airfare hikes. Intra-European
airfares could decline slightly if economic malaise results in less demand. In
the US, airfares are high now, and will continue to inch up as airlines
continue to reduce capacity. In India, the new breed of low-fare carriers discounted too much too soon, which
means they will probably have to increase fares in order to survive. Despite
the emergence of more Asian low-cost carriers, intra-Asian fares will continue to
rise, along with demand for air travel to, from and throughout the region. In
2012, China’s Beijing Capital International is expected to surpass Atlanta’s
Hartsfield-Jackson International in the US as the world’s busiest airport.
is experiencing a hotel building boom, and that steady stream of new rooms
should keep a lid on any dramatic price increases. After years of price spikes,
hotel rates in overbuilt Shanghai are moderating, and there’s a similar
phenomenon happening in New York City where prices have jumped -- but would
have jumped even more without the recent spate of new hotel openings. On the
other hand, rates are increasing 20 to 30% each year in booming cities like Sao
Paulo and Rio de Janeiro in Brazil, where new hotel construction has not been
able to keep pace with rapidly increasing demand. Start saving if you are
planning a trip to Carnaval in Rio this year.
The gap between peak and off peak pricing is going to widen around the world. If
you have the flexibility to travel off-peak (winter in Europe, monsoon in
India, summer in desert and ski regions), you will find some very good prices.
But if you need to travel during peak season, prepare to open your wallet very
news is that more upscale hotel chains will join their midscale counterparts to
offer free in-room wi-fi. The bad news is that with more
people using tablet computers, smart phones and laptops, connection speeds are
going to take a big hit. Some hotels are addressing this by offering slower connections
for free (for checking email or surfing the net), but charging for higher speed
connections for those who wish to stream movies or upload large photos or
files. While in-flight wi-fi has been a largely American experience until now,
airlines in other countries are busy adopting newer satellite based
allow travellers to log on over land and sea. Expect to see more of this as the
technology evolves in the coming year.
Business travellers’ smart phones will become a bigger focus, being used to open hotel room doors
and for payment as “mobile wallets”
instead of a credit card. There will be more promotions encouraging the use of
mobile devices to book and manage travel reservations.
Meetings and conventions
Attendance will rise at large trade shows and conventions this year as pent up
demand is released. Many companies banned non-essential travel over the last
two or three years, and business travellers are now eager to get out of the
office and re-establish face-to-face contact with customers and colleagues.
However, cost control will be the watchword as companies closely scrutinize travel
expenditure. Staff will probably have to stay at cheaper hotels, fly economy
and eat at less expensive restaurants.
while you may be travelling more in 2012, it’s likely that you or your employer
will have to stretch limited budgets further -- meaning less luxury and more
scrutiny of expenses.
McGinnis is the business travel columnist for