Global economy airfares were up $76 (17%), and business airfares were up $246 (15%) in 2023 compared with 2019, according to the Global Quarterly Trend Report from FCM Consulting, a division of FCM, the travel management company (TMC). In North America, the city pair with the largest economy rate increase (33%) was New York (JFK) – Los Angeles (LAX), while Newark – Chicago O’Hare saw the largest rate decrease (24%).
FCM said airline global capacity is expected to exceed pre-pandemic levels this year, but that airlines are adding more seats with fewer flights as a result of “fleet configuration changes and shifts in schedules to meet demand.” In North America, for example, FCM projects the number of available seats in the first half of this year will be up 7% compared with the first half of 2019, but the number of flights will be down 7%. In Europe, the number of seats will be down 1% and flights down 8%, according to the report.
On the accommodation side, the average room rates (ARR) in North America increased to $250 (up $17) in 2023 versus 2022. Compared with the previous quarter, some of the largest rate increases during the fourth quarter included Mexico City (up 37%), Los Angeles (up 36%), and Chicago (up 12%), while Vancouver (down 32%) and New York (down 22%) saw some of the largest decreases. Overall, the quarter saw just a 1% increase from the previous quarter, signaling a potential return to rate stability. Furthermore, occupancy levels, which were at 63% in 2023, also seem to have stabilized in North America, as there was just 1% growth year over year.
The report also analyzed the car rental market, and the global average daily rate (ADR) increased to $73 (up $20) in 2023 versus 2019. However, in comparison with the global level, the ADR for the US ($66) and Canada ($55) were each lower for the full year against 2019.
Ashley Gutermuth, head of FCM Consulting, Americas, said that “It’s shaping up to be another big year for business travel, with travelers eager to get back on the road and airlines expected to increase seat capacity, especially in North America.” And with the busy year ahead, she said, “it’s essential that travel managers prioritize communication in order to support their travelers and ensure they have a clear understanding of industry changes, which could also result in changes to policy.”
Image: Shutterstock/FCM
