GBT Forecast 2018: Rising demand, flat fares in China market
While China is gaining steadily on the US for the title of world’s largest economy, it has already claimed the top spot in business travel.
Asia’s rising middle class and solid economic growth, particularly in China and India are causing demand for travel to surge in 2018, according to Global Business Travel Forecast 2018, a recent study by American Express Global Business Travel (GBT).
Despite significant overcapacity, look for Chinese airlines to continue their aggressive expansion on international routes, especially those to Europe and the Middle East, where yields have been stronger. Chinese airlines will have opened 102 international destinations in 12 years in a mad dash to secure traffic rights and airport slots. Overall, 2018 should see shallow fare increases on domestic flights, while international and intra-Asia prices will stay flat.
While a relative latecomer to high-speed rail (HSR), China has more than made up for lost time with over two-thirds of the world’s HSR capacity and significant efforts underway to expand the overall network by another 50%, to over 18,000 miles total, by the end of 2020. The total length of high-speed lines will be further extended to reach 23,612 miles by 2025, and 27,962 miles by 2030.
Despite the rapid increase of tourism and business travel within the country, the growth of China’s hotel pipeline has been even more robust, representing over 50% of Asia Pacific hotel development. With supply projected to outpace demand in 2018, hotel rates for the country are expected to rise only moderately in 2018.