SA airfares and hotel rates to increase – report

AIRFARES and hotel rates
are expected to increase
for South Africans in
2017.
According to the 2017 Global
Travel Price Outlook compiled
by the Global Business Travel
Association and Carlson
Wagonlit Travel, SA airfares
are expected to increase by
4,4% compared with a global
increase of only 2,5%. Other
African countries are expected
to show decreases in airline
prices, with Kenya expected to
see a 5,8% drop and Nigeria a
6% decrease.
South African hotel rates
are also expected to increase
by 7%, whereas most other
countries in the Middle East
and Africa are expected to see
a considerable drop in rates.
Clifford Ross, ce of the
City Lodge Hotel Group, says
the rest of the world simply
doesn’t have the same
inflation rates as South Africa.
“One needs to compare
apples with apples.” He adds
that inflation rates are near
zero in most countries, but
above 6% in South Africa.
According to Clifford, South
Africa will not see a surge in
hotel prices in the next year.
“We expect rate increases
to be in line with inflation,
possibly inflation minus in the
current economic climate in
South Africa.”
Marcel Von Aulock, ceo of
Tsogo Sun, says 7% can’t be
considered a surge in rates
when inflation is around 6%.
“The local industry is still well
below long-term occupancy
trends so there should be
some recovery. However, it’s
not boom time by any means.”
Clifford adds: “Prices will
only ‘surge’ if all the stars
align. Demand needs to
increase significantly, no
new room capacity coming
into the market, inflationary
considerations, good economic
growth, and a positive financial
outlook for the country… or
the industry will still be playing
rate catch-up since the 2008
halcyon years when rates in
South Africa were keeping
pace with the rest of the
world.”
Jeanne Liu, GBTA Foundation
vice president for Research,
says although the outlook
generally shows only marginal
increases or flat travel prices,
the high level of global
uncertainty will mean that
TMCs and travel buyers will
need to remain on their toes.
“The key to building successful
travel programmes in 2017
will be watching and reacting
to an ever-changing global
landscape.”