Intercontinental airfares were declining in the second quarter as average daily hotel rates increased “significantly” in several markets, according to Advito's quarterly air and hotel price index released Thursday.
According to the index, intercontinental economy fares are falling year over year for flights originating in all regions except Africa and Latin America, where fares are up 1% year over year. According to Advito, the decline is due to “a strong recovery in airline capacity…the impact of weak economic conditions and high travel costs in some key countries in Asia and Europe on passenger demand.” The biggest declines were seen in flights originating from Asia, down 15% year-on-year, and in North America, down 9% year-on-year.
Intercontinental business class fares generally declined less than economy fares, with both North America and Europe up 1% year-over-year in the quarter. However, Advito noted this may be because business class cabin seats are booked later than economy fares.
Domestic and regional economic freight rates in the second quarter were more of a mixed bag, with year-over-year increases in Africa, Europe, North America and Latin America but declines in Asia, the Middle East and the Southwest Pacific. Advito noted that economy fares in North America, up 1% year-over-year, “remain high due to strong demand from both leisure and corporate travelers.”
Meanwhile, hotel average daily rates increased 6% year-over-year globally, with increases in all seven regions in the second quarter, with the highest increases in Latin America (13%), Europe (9%) and Africa (6%). I did. According to Advito. Growth rates in other regions range from 2 to 3 percent.
Advito noted that inflation, leisure travel and in-hotel costs are driving the increase, but this has slowed compared to the first quarter as both business and leisure travel stabilized.