Impact Publications : MiceBTN_65
MICEBTN - DEC 2016 - FEB 2017 • Page 27 ed to remain flat as increased demand from visitors taking advantage of the weak Australian dollar offsets ongoing weakness in the mining sector. Americas highlights: North America remains strong while Latin America shows signs of improved demand In North America, overcapacity and fierce competition between legacy carriers and low-cost carriers on heavily trav- elled routes are leading to anticipated fare decreases. How- ever, lower fares will be offset by higher ancillary fees as airlines continue to look for new sources of revenue. In Latin America, moderate decreases are expected across Brazil and Argentina due to overcapacity, political turmoil and declining currency values while the stronger economic performance of Chile and Mexico may lead to fare increases. With significant new supply coming on line in the United States, only moderate increases are projected as inventory remains matched with demand. Rates will increase slightly in most of Canada due to an increase in demand linked to the weak Canadian dollar. Despite some bright spots in Colombia and Mexico, demand in Latin America remains low and rates are expected to decline slightly overall. Overall, the presence of the zika virus has not impacted the number of tourists go- ing to the region in 2016, and the same is expected for 2017. In the United States, car rental rates for corporate travel- lers will remain flat in 2017 due to excessive fleet sizes and strong competition among the major suppliers. Following the lead of airlines and hotels, car rental companies are expected to increasingly focus on ancillary offerings to drive profits. As ride-sharing companies such as Uber and Lyft continue to invest in their corporate travel offering, taxi and car servic- es have felt the impact, spurring investments in mobile and the user experience to attract travellers back. A softening of rates is also expected in Canada, while an influx of new play- ers and capacity in Latin America is holding prices in check. EMEA highlights: Security issues, political concerns and Brexit vote create uncertainty In Europe, airlines continue to face significant headwinds in the form of lacklustre economic performance, security concerns, long-haul pressure from Gulf carriers and the growing presence of low-cost carriers on short-haul routes. With low-cost carriers looking to continue their aggressive expansion efforts in 2017, airfares will stay level with 2016. In the UK, the currency devaluation following Britain’s decision to leave the European Union (referred to as Brexit) has had the short-term effect of making outbound travel from the UK more expensive. However, the medium to long term impact of Brexit on business travel will not be known until the UK government starts negotiations with the EU, which are expected to begin in Q2. Political and economic uncertainties in Europe are flattening hotel demand but the overall lack of new supply should help sustain mild rate increases. Despite speculation that the UK would see prices rise on higher demand from value-seeking tourists and domestic vacationers forced to stay at home, rates are staying level and should remain so through 2017. In European countries where demand growth is strong, such as in Ireland or Russia, price increases should be similarly robust. By contrast, the strong demand experi- enced in Dubai and Abu Dhabi should result in only minimal price increases given the significant amount of new con- struction in those cities. Travellers renting cars in Europe are increasingly look- ing for options with a lower environmental impact, such as hybrid and electric vehicles. While suppliers are prepared to increase their fleets in this respect, they will only do so once the support infrastructure becomes available. Rates should rise only marginally across all regions in Europe as economic growth is tempered by strong competition among car rental companies looking to expand their region- al footprints. For more information on the Global Business Travel Forecast 2017 by American Express Global Business Travel, please visit: http://www.amexglobalbusinesstravel.com/glob- al-business-travel-forecast-2017.