TORONTO — FCM Consulting has released its Global Quarterly Trend Report for Q4 2023, sourced from FCM’s corporate booking data.
FCM Consulting is a division of travel management company FCM, which is the flagship corporate travel arm of Flight Centre Travel Group.
According to the report, global air travel capacity in 2024 is expected to surpass 2018 and 2019 levels, with North America forecasted to see a 7% increase in seats offered this year.
The report also notes that the end of 2023 closed a milestone year for the industry, “resulting in the busiest and least interrupted year for business travel in over four years.”
Traveller confidence continues to trend up, increasing the likelihood of even more trips booked in the year ahead, despite rising costs across the airline, hotel, and car rental market.
The report highlighted a key trend that is set to continue for 2024 – more seats with less flights – as global air travel capacity is expected to surpass annual capacity levels from 2018 and 2019.
As a result of fleet configuration changes and shifts in schedules to meet demand, the global forecast for H1-24 is that there will be +97.9 million (+3.5%) more seats and -2.1 million (-5.6%) fewer flights offered, compared to H1-19.
Regionally, the forecast for North America is predicting that there will be +7% more seats and 7% less flights offered.
“It’s shaping up to be another big year for business travel with travellers eager to get back on the road and airlines expected to increase seat capacity, especially in North America,” said Ashley Gutermuth, Head of FCM Consulting, Americas. “And with the busy year ahead, it’s essential that travel managers prioritize communication in order to support their travellers and ensure they have a clear understanding of industry changes, which could also result in changes to policy.”
Gutermuth also noted that despite the increased seat capacity, businesses will still have to potentially reset their budgets as travel costs are projected to increase across the industry by approximately 3%.
Based on a price analysis of 380 different city pairs across the world, global economy airfares were up $76 (+17%) and business airfares were up $246 (+15%) in 2023, compared to 2019. In North America, the city pair with the largest economy rate increase (33%) was JFK/New York – LAX/Los Angeles, while EWR/Newark – ORD/Chicago saw the largest rate decrease (24%). The city pair with the only business rate increase (11%) was JFK/New York – YYC/Calgary.
On the accommodation side, the average room rates (ARR) in North America increased to $250 (+$17) in 2023 versus 2022. Compared to the previous quarter, some of the largest rate increases during Q4-2023 included Mexico City (+37%), Los Angeles (+36%), and Chicago (+12%), while Vancouver (-32%) and New York (-22%) saw some of the largest rate decreases.
Overall, Q4-2023 saw just a 1% increase from Q3-2023, signalling a potential return to rate stability, according to the data. Occupancy levels, which were at 63% in 2023, also appear to have stabilized in North America, with 1% growth year-over-year.
The report also analyzed the car rental market and the global average daily rate (ADR) increased to $73 (+$20) in 2023 versus 2019. In comparison to the global level, the ADR for U.S. ($66) and Canada ($55) were each lower for the full year.
More information from the FCM Consulting Global Quarterly Trend Report can be found here.
