Australian airlines forecast a profitable 2022 with soaring domestic travel in the corporate market. Domestic airfares were 27 per cent higher in July – December 2022 compared with the same period in 2021.
Airfares have risen due to strong demand for post-COVID travel and limited supply caused by airlines having to scale back their schedules in response to high jet fuel costs and operational challenges.
Domestic Hotels had a good 2022, with prices increasing by an average of 10-15% across most hotel chains (i.e. Accor / Quest) compared to 2021.
Car suppliers sold off their vehicles during COVID and have only recently commenced to increase capacity. However, the supply shortage did increase car hire prices by an average of 15% during 2022 compared with 2021.
While staff absences have declined, the industry continues to deal with workforce shortages and supply chain issues.
The outlook for 2023 is that Domestic travel will remain strong and outperform pre-covid 2019 travel. We should see a softening of airline prices as they increase services in 2023 due to competition and the ACCC investigating their practices. Hotel prices will stabilise as we see more capacity (i.e. new hotels), with a similar scenario for car hire.
Some key opportunities for doing a Travel review in 2023.
- Record Airfare, hotel and car prices will result in high baseline prices for the 2022 period.
- Market Share will be key for suppliers (Air, hotel, car), so again an opportunity to get better pricing.
- Most Travel management companies (TMC’s) have increased their fees to above-market prices, and their service levels have dropped due to staff shortages and assigning more accounts to travel bookers.
- Technology (Online booking tool) and payment of travel, there are many OBT’s and payment options to choose from; how do you navigate which is right for your business? Having the right OBT can save you thousands ($$$).
- Detailed ‘Compliance reporting (missed savings)’ and ‘Unused ticket report’ is key to saving clients thousands of dollars. Unfortunately, there is little focus in this area due to high-level reporting not providing clients with the correct information.
Want to learn more? Please contact our travel specialist Hassan Nasser.
| Hassan NasserPrincipal Consultant |
 Expense Reduction AnalystsT: +61 409 700 505hnasser@expensereduction.com |