2024 marks full throttle return of business travel with surging seat capacity

Thursday, November 23, 2023

The travel trend observed in Q3-2023 continued the moderation seen in H1-2023, indicating a stabilization in the rapid growth that began in late 2021. FCM Consulting’s latest Global Quarterly Trend Report notes positive but moderated travel demand for the third consecutive quarter. The key insight reveals that Q1-2024 is projected to have +71.8 million (+5.3 per cent) more seats (both domestic and international) compared to 2019 for the same period. However, the final seat capacity for 2023 is forecasted to be -2.2 per cent lower than that of 2019.

Analyzing regional air seat growth, Africa emerges as the leader with a projected increase of 14 per cent, followed by the Middle East (up 11 per cent), Latin America (eight per cent increase), North America (up eight per cent), Asia (seven per cent rise), Australasia (remaining stable), and Europe experiencing a decrease of two per cent.

A major obstacle to recovery has been the limited airline capacity and competition. While conditions are slowly improving, especially as the year unfolds, a persistent concern revolves around the shortage of available seats on flights connecting Australia and Europe through the Middle East.

According to IATA’s August 2023 report, global Passenger Load Factors (PLF) reached 84.6 per cent, with domestic PLF at 83.5 per cent and international PLF at 85.4 per cent. Leading domestic PLF across major markets were the USA (84.5 per cent), India (83.9 per cent), Brazil (83.1 per cent), Japan (82.5 per cent), and Australia (82.3 per cent). North America led in international PLF at 87.7 per cent, while Africa reported the lowest at 76.2 per cent.

In 2023, hotel occupancy levels averaged 68 percent per month, while corporate average room rates (ARR) have remained stable over the past six months. Year-to-date (YTD) ARR for 2023 compared to 2022 were as follows: North America at USD$250, Australia/New Zealand at USD$160, Europe at USD$194, Asia at USD$173, Middle East/Africa at USD$203, and Latin America at USD$128.

For car hire, the global average daily rate (ADR) has increased by four percent YTD-2023 compared to 2022. The ADR forecast indicates that rate increases will stabilize to +2-3 percent in 2024.

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