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Asian airfares to climb 5% in 2013


Published on Oct 5, 2012

Airfares in the Asia Pacific region will rise 5% next year, with hotel rates edging up 1%, according to the latest forecast by Egencia, the corporate travel arm of Expedia.

In its 2013 Global Corporate Travel Forecast, which was released today (4 October 2012), Egencia found that airlines’ average ticket prices (ATP) and hotels’ average daily rates (ADR) will rise in Europe, North America and Asia Pacific.

ATPs are expected to climb 3% in Europe, 5% in North America and 5% in Asia Pacific in 2013, while ADR growth is forecast to be slower, rising just 1% in Asia Pacific, 2% in Europe and 3% in North America.

“The global economy is volatile, and we’ve seen some deterioration in CEO sentiment in recent months. But suppliers have carefully managed capacity this year so we expect, even with moderating demand, some slight pricing increases in most regions,” said Rob Greyber, President of Egencia. “Even with the potential for higher costs, we believe there are a number of opportunities to save and we are working closely with clients to ensure they achieve their goals.”

The change in Asian airfares will vary significantly from market to market. New LCCs will increase capacity to regional markets, keeping prices contained. Hong Kong, Singapore and Sydney will see strong capacity increases, which will keep ATPs virtually flat. Prices in India however, will increase almost 10% due to limited seat growth. With the exception of India, Bangkok and Shanghai (both +9%) are expected to see the strongest growth.

In the hotel sector, Egencia predicted “a very modest” ADR growth, although some markets will be stronger than others. Hong Kong (+9%) and Sydney (+5%) will benefit from a limited amount of new rooms, while the sharp decline in India is expected to continue in 2013 as demand fails to keep pace with the influx of new supply. A similar situation will occur in Shanghai. Singapore has seen strong demand growth and that looks set to continue into 2013.

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