Advito Q2 Index: Intercontinental Airfares Down, Hotel Rates Rise

Intercontinental airfares in the second quarter are declining as average daily hotel rates are having "significant" increases across several markets, according to Advito's quarterly Air and Hotel Price Index, published on Thursday.

The index showed intercontinental economy fares are down year over year on flights originating from every region except Africa and Latin America, where the fares are up 1 percent year over year. The declines stem from "strong recovery of airline capacity … a sluggish economy for some key countries in Asia and Europe and the impact of high travel costs on passenger demand," according to Advito. The sharpest declines are on flights originating in Asia, down 15 percent year over year, and North America, down 9 percent year over year.

Intercontinental business-class fares generally are showing less of a decline than economy fares and are up 1 percent year over year for the quarter in both North America and Europe. However, Advito noted that might be due to business-class cabin seats being booked later than economy fares.

Domestic and regional economy fares are more of a mixed bag in the second quarter, up year over year in Africa, Europe, North America and Latin America but down in Asia, the Middle East and the Southwest Pacific. With a 1 percent year over year increase in economy fares in North America, Advito noted that they "remain high sustained by a robust demand for both leisure and corporate travelers."

Hotel average daily rates, meanwhile, are up 6 percent year over year globally and up across all seven regions in the second quarter, with the highest increases in Latin America (13 percent), Europe (9 percent) and Africa (6 percent), according to Advito. Increases in other regions are in the 2 percent to 3 percent range.

Advito noted that while inflation, leisure travel and internal costs at hotels are driving the increases, they also have decelerated compared with the first quarter as both business and leisure travel has leveled off.