Travel group Flight Centre has revealed its forecasts for Aussie travel in 2023 with good and bad news for travellers, depending on the destination.
The good news is that domestic travel costs are expected to decrease but it’s likely international travel costs will continue to remain high until Chinese airlines return to the skies if and when the COVID zero policy is lifted and travel bans end.
Global MD at Flight Centre’s Corporate Traveller Tom Walley said as domestic travel costs in the US begin to fall, it’s likely the same pattern will occur in Australia next year and pointed to domestic carrier Rex Airlines providing more flights and increasing competition in the market.
This will provide some much needed relief for Australian travellers who have been seeing flight prices at their highest in the last few months since before the pandemic.
International travel prices to stay high, for now
The good news for travellers looking to head overseas is that there will likely be a fall in international travel costs, but this might not happen until mid to late 2023.
Walley said the absence of Chinese carriers in the market has had a huge impact on competition and as a result flight costs for international fares are rising. It’s expected that Chinese airlines will return in the first half of 2023, bringing competition back to the market and flight capacity back to roughly 90 per cent of pre-COVID levels by the middle of next year. As a result, the cost of Australia-Europe and Asia routes will decrease, but Australia-US routes will be slower to fall. Walley also expects hotel and car rental capacity to increase early next year.
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Business travel to boom
The way we work post-pandemic has also impacted trends in the travel market. Flight Centre’s corporate divisions recovered well in 2022 with travel transactions returning to 90 per cent of pre-COVID levels.
Walley said he was forecasting that this trend will continue as more people in middle management roles start travelling again for work. In the past few years, only essential workers and senior and executive roles had been travelling as fears of COVID and cancellations have stopped many companies from booking travel for staff.
Work from anywhere policies to drive more travel bookings
As the employment market remains tight, many organisations are offering staff the opportunity to ‘work from anywhere’ for a period of time each year allowing employees to travel overseas or domestically and work at the same time.
Walley said these policies were designed to retain people and motivate more executives to take working holidays. As more companies offer the ‘work from anywhere’ approach as an option it’s expected more Australians will take it up and travel more frequently.
Digital documents and gig economy partnerships
Other trends likely to increase in 2023 is the increased digitisation of travel documents, IDs and services and travel providers will tap into the gig economy such as Uber eats and hotels where guests can order food directly rather than using an in-house room service menu.