24 Jan What Travelers and Hoteliers Need to Know About the Economy in 2017
In Skift’s Corporate Travel Forecast report, the research team labeled 2017 “The Year of Uncertainty.” It’s pretty clear why following the whirlwind year of 2016: After a divisive US election, Brexit, and terrorist attacks in Europe, most of us needed a few minutes to catch our breath from last year. Experts tell us to expect a few setbacks since we’re not done reeling from the aftermath of global change.
But the travel world keeps on moving and shaking, and you never know what you’re going to see next. Fortunately, we’ve kept up with the economic trends that can make sense of all the noise and offer us some reasonable conclusions.
On a global commerce scale, the latest projection from the International Monetary Fund for 2017 is a growth rate of approximately 3.5%. Overall, expect travel to be somewhat impacted by too much supply and not enough demand. Some of the fastest-growing — and now nearly oversaturated — markets are Chicago, San Francisco, Minneapolis, and NYC.
Hotel goers won’t see a strong correlation in modest supply growth and the nightly cost of their rooms; for the most part, the rates will remain flat in 2017. While everyone would love to hear that you’ll be offered deeply discounted rates this year, stability can come as a nice surprise too.
In airlines, rates will also plateau this year, enjoying a small (about 7%) reduction from 2015 and 2016. No-frills airlines rose to the demand of budget-conscious customers who wanted the best bang for their buck. Popular US airlines in this arena include Southwest, JetBlue, and Allegiant. Instead of taking a hit, airlines are trying to increase their ancillary fees. In fact, airlines around the world snagged $40.5 billion in ancillary fees and charges last year, a record-breaking number. Pack as lightly as possible next time you travel, and try to skip the snack upgrades to avoid these pesky travel fees.
Renting a car? Not as many people chose rental car options last year with the ubiquity of Ubers and sharing economy rental services like Turo, so rental car standbys like Enterprise and Hertz have some healthy competition. They’re planning to accrue extra cash in ancillary fees just like their friends in the airline industry.
Every year is a new adventure, as you can see from some of our wacky, surprising 2017 travel trends presentation. From here, it looks as though we can expect some pricing stability in the coming year, as modest growth will minimally increase what matters most to travelers– hotel rates. If we hear anything different, we won’t hesitate to let you know, so stay tuned!
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