Fares, room rates set to surge

Up, up and away ... Travel prices are set to rise, research shows.
Up, up and away ... Travel prices are set to rise, research shows. 

The travel trade is reporting that the cost of Australian hotel rooms and air fares are set to “rocket” next year, according to the latest projections from the big corporate travel booker, Carlson Wagonlit (CWT).

Reflecting conditions that business travellers in particular are likely to encounter in the coming year, the CWT Global Travel Forecast reveals that room rates in Australia will climb between 4.1% and 4.9% in the first half of 2012, and between 4.4% and 5.1% in the second half.

For visitors to Australia, the room rates are extra high considering than the Australian dollar is trading above parity with the US dollar. As I’ve written before, Australia has become one of the most expensive countries on earth for all types of consumer purchases as well as for travel and accommodation.

Trade media news service Travel Today reports the CWT projections for Australian hotel room rate rises are well above the Asia Pacific average where rates are expected to fluctuate between a 1.9% decrease and 2.1% increase in the first half of 2012, and between a 0.9% decrease and flat performance in the second half.

The high Australian growth rates are fuelled by high occupancies, says the CWT report, particularly in Sydney where average hotel occupancy rates are 82.2%, second only to Hong Kong with 82.3%.

“Asia Pacific business hubs currently boast the highest occupancy rates in the world, presenting serious challenges for managed hotel programs to secure available rooms on peak nights of the week, much less obtain negotiated corporate rates,” the report says.

CWT’s finding corroborates the conclusions earlier this year by The Economist Intelligence Unit’s worldwide cost of living survey, which found Australian cities were among the most expensive for business trips.

In Melbourne, The Economist survey found accommodation, meals, taxis, drinks and a newspaper now cost the average business traveller $US760 ($A745) a day, with Sydney close behind at $US627 ($A614).

CWT also reckons air travellers are going to get it in the neck in the coming year. Australian airfares are expected to increase by 3.5% to 6.8% in 2012, again above the regional average of between 3.1% and 3.8%.

According to CWT, fares are rising in spite of increasing competition. “The airline landscape throughout APAC is populated with a dynamic mix of legacy carriers and a growing group of low-cost carriers that have been applying price pressure that affects overall fares in the region, whether for business or leisure travel,” the CWT report says.

I would certainly say that discount fares are dearer since Tiger Airways’ grounding and its limited resumption of services.

What’s been your experience with business and leisure hotel room rates this year in Australian cities and overseas? Have you found you have bargaining power if you shop around or does the market seem to be getting tighter? How have you gone in trying to find cheap air fares in the past few months? Are you finding the actual fares you’re being asked to pay (as opposed to advertised fares) are about the same or dearer than earlier this year or last year?

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