In 2013, business travellers could see increased costs in Latin America, Asia
and Eastern Europe as executives look for new opportunities in these emerging markets.
The American Express Global
Business Travel Forecast 2013, released in October 2012, notes that economic
growth from Argentina to Poland -- and the business people looking to
capitalise on it -- will be the main driver for executive trips in 2013. As
such, strong economies such as Brazil, India and Russia will see a peak in
airfares cost, and hotel room rates will climb as road warriors check in to
these countries in greater numbers.
“Airline capacity within these emerging
markets simply can’t keep up with demand,” said Adam Knights, group marketing director
at ATPI, a travel management company. “People
travelling to and from these countries are growing exponentially, and with only
so many business class seats, the lower-priced ones get snapped up early.”
American Express predicts that because of
this, short-haul economy fares will rise by approximately 10% and long-haul
economy fares will increase about 8% in Latin America. India is expected to see
the greatest price increases in the Asia-Pacific region, of up to 8% for
economy long-haul flights and Russia will see long-haul fares grow by up to 7%.
For executives travelling to these places, this
could mean longer journeys due to the lack of reasonably priced seats on direct
“Demand versus capacity is always the
greatest driver of prices. The fact is, hotel room numbers are running to catch
up as well,” explained Peter Nixon, commercial manager at Business Travel Direct, a travel
management company. To add to this, the infrastructure in emerging markets often
struggles to keep up with visitor growth. This includes road and rail links and
quality business hotels in more remote locations.
“For those who aren’t used to travelling
off the beaten path it can be quite a shock to the system when they’re looking
to tap markets that might not be what people are used to back home,” Knights
The advice from business travel agents is
to plan as far in advance as possible. “Spend more time researching the
journey, as the very cheapest flight may be tempting but it will often be very
inconvenient,” said Martin Lumbye, a partner at the flight and hotel search engine,
The only consolation is that global
economic uncertainty – due to the fiscal crisis in Europe and the deceleration
of growth in China in the last year – is
expected to dampen demand for business travel in these economies and keep rates
in mature markets, including China, relatively flat. “And in time, these emerging
markets will mature and expand to accommodate business travellers, with more
hotel chains opening up and flight routes launched,” Lumbye said.