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2024 Travel Cost Forecasts

2024 Travel Cost Forecasts

If you're helming the ship for your team's business travels, we've got your back. We're here to unravel the mysteries, decipher the unexpected, and arm you with travel cost insights for the journey ahead in 2024.

 

This Year’s Outlook: Moderate Shifts Amidst High Forecasts

After recent, historical cost increases like a 49% North America airfare increase in 2022 caused by labor shortages, rising fuel prices, and supply chain bottlenecks, 2024 looks… fairly boring. One category could even see lower rates. And we couldn’t be happier. CWT and GBTA anticipate moderate travel cost increases throughout 2024, partly due to addressing the above issues sparked by COVID-19.

2024 North American Rate Forecast

Flights: Soaring Highs to Steady Rides

Air travel demand took off in 2022, straining struggling airlines post-pandemic, culminating in a staggering 49% rise in average ticket prices in North America. Thankfully, 2023 saw fares stabilize near pre-pandemic levels (+3.8%), with a modest anticipated growth of +1.8% in 2024 according to the GBTA survey. This is encouraging news for travel budget planning, although fares still linger 10% higher than 2019, driven by labor shortages and reduced flight availability.

2024 North American Average Airfare Price Projections

Something important that doesn’t show up in the forecast: in April 2023 American Airlines limited half of their lowest fares to NDC-channels, meaning that most corporate travel programs paid higher fares on American.

“46% of poll respondents listed technology adoption, including NDC, as one of the biggest challenges in 2024. Budget constraints ranked second at 38 percent.” – BTN, Oct. 30, 2023

Fortunately, AmTrav has been NDC-ready since 2019 and our customers are seeing lower fares on American 60% of the time since August. More importantly, customers can rest assured that they are seeing the lowest fare, so they don’t have to price check on other sites, making it easier for Travel Managers to control spend, increase compliance, and leverage AmTrav’s 24/7 US-based customer support.

 

Hotels: Inflation Keeps Rates Elevated

Hotel rates soared by 34% in 2022, fueled by a surge in leisure travel termed "revenge travel." However, this trend is cooling off with modest increases of +4.0% in 2023 and a projected +3.3% in 2024 in North America, pacing along with inflation.

2024 North American Average Hotel Price Projections

Post-pandemic, leisure travel initially outpaced business travel. However, by Summer 2023, the scenario flipped as business travel inched closer to pre-pandemic levels, expected to continue in 2024. This presents an opportunity for businesses to renegotiate better hotel rates.

Despite the leisure travel cooldown, hotel rates remain historically high at 10% above 2019, driven by increased operational and labor costs, leading some hotels to limit inventory to counter staff shortages, further inflating rates.

 

Cars: A Silver Lining

With travel coming to a screeching halt in 2019, many car rental companies sold a good portion of their vehicles just to keep their heads above water. However, like airlines and hotels, the fast and furious resurgence of travel post-2021 created demand overnight for vehicles that were nowhere to be found thanks to shortages in semiconductors, decreasing the ability to manufacture new vehicles and causing hardship for companies hoping to replenish their inventory.

2024 North American Average Car Rental Price Projections

This trend has not only cooled, but car rentals is the only category in this list to observe little to no price change in 2023 and in 2024. Average daily car rental rates are flat in 2023 and expected to decrease – decrease! – by 2.6% in North America. 

Demand is still expected to grow in 2024 and supply chain challenges still plague the industry, so it might be appropriate to remain cautiously optimistic.

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