Demand for business travel in the Asia Pacific region is set to continue growing in 2012 despite the rising cost of travel.
According to the 2012 Industry Forecast released by BCD Travel consulting unit Advito, growth in business travel will continue next year, especially to emerging markets, after reaching pre-recessionary levels this year.
Based on the provisional assumption that economic growth will continue in 2012, bolstered by strong demand for travel to Brazil, Russia, China and India, Advito expects business travel demand to increase by medium to high single-digit percentages in growth markets and by low single-digit percentages in North America and Europe.
However the cost of travel is expected to rise as well. This is partly due to an imbalance of supply and demand, with demand growth outpacing supply, especially in India and China, thus pushing up the cost of travel products.
Meanwhile, rising oil prices and airline consolidations will raise the cost of trips. Advito expects the cost of air travel to continue through next year at a rate of 4-6%.
Hotel prices are also projected to rise at varying rate according to location. Advito says the hotels are bullish about their ability to raise prices through 2012, with travellers looking at a cost increase of 2-6% worldwide, 7% in Asia and double-digit growth in gateway cities.
The consultancy firm warns that the major issue for travel managers in Asia-Pacific will be demand management, not supply management. With rising travel costs and the increasing need for business travel, particularly form the emerging markets, companies will be tightening travel expenditure through the course of next year.
Source: http://www.vietnamtourcompanies.com/business-travel-to-grow-despite-price-increases
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