2020

Airline and hotel costs to increase worldwide next year, study says

The Tom Bradley International Terminal at Los Angeles International Airport. A study by a business travel trade group and a travel agency predicts higher travel costs worldwide next year. (Kelly Barrie / PanicStudio LA)

The declining airfares over the last two years in the U.S. look like they are about to become a happy memory.

Airfares are projected to rise 3.5% worldwide next year, with hotel rates jumping 3.7% and ground transportation, such as taxis, rising 1.6%, according to a travel management company and a trade group for business travel managers.

Rising fuel costs and increased demand were cited as the main reason for the increases in the study by Carlson Wagonlit Travel and the GBTA Foundation, the education and research arm of the Global Business Travel Assn.

In North America, the increases will be more modest, with airfares expected to rise 2.3% and hotel rates to increase 2.9% next year, the study said.

The boost would be a departure from recent travel trends in the U.S. in which airfares have been dropping and hotel rates have only increased slightly each year.

The average domestic airfare in the United States fell from $402 in 2014 to $369 in 2015 to $347 in 2016, according to the Bureau of Transportation Statistics. The cheaper fares have mostly been attributed to fuel costs that have dropped dramatically starting in 2014 but have been creeping up in the last year.

Hotel rates in North America have been increasing gradually in the last two years, rising from $116 in 2014 to $119 in 2015 to $120 last year, according to Hotels.com. The new study suggests that past mergers among giant hotel companies will begin to affect prices next year.

Marriott International last year completed the $13-billion purchase of Starwood Hotels and Resorts to become the world’s largest hotel company, with more than 5,700 properties worldwide.

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