Transportation Costs are Likely to Increase in 2016

Today, the economies of many countries in the world are growing, the gas prices are decreasing and there is huge demand for services provided by travel agencies. The data of numerous analysis shows that transportation costs are expected to continue rising in different parts of the world the next year. In this article, we are going to make predictions about air and ground transportation costs for 2016.

Most likely that air and ground transportation costs will modestly grow the next year, according to the data provided by The American Express Global Business Travel Forecast 2016. Now, let’s make the deep analysis of the situation and try to realize why this is going to happen.

Without a doubt, the transportation industry depends on fuel costs so much. So, we can conclude that if fuel costs are constantly decreasing then transportation costs have to lower as well. Nevertheless, this doesn’t happen at present. Why? In fact, this situation can be explained in numerous ways. As the saying goes “Supply creates its own demand.” Therefore, when we analyze the transportation markets we will see that both air and ground transportation services are highly demanded in different regions of the world these days. Moreover, the demand is growing year after year. As a result, the prices on transportation services are increasing as well.

Obviously, the global economy has a huge impact on transportation and travel industries. Today’s data show that the global economy grows slowly. That’s why we can predict that the global demand for travel will grow slowly as well. Today, the economy of the United States shows fast development. If the situation with the US economy goes on the demand for travel and transportation services will probably grow in this country the next year. So, we can predict that transportation costs in the United States will increase either.

The level of competition is considered to be another important factor that has an influence on transportation rates. So, the higher level of competition in transportation industry is – the lower transportation rates are. As we can see, travel and transportation industries are highly competitive in developed countries at the moment. This will certainly have an impact on transportation costs.

It goes without saying that the travel industry is changing rapidly these days. So, how do transportation costs will react to these changes? The Vice President of American Express Global Business Travel, Caroline Strachan, has recently expressed her opinion on the current changes in the global tourism industry. As she has said, the new era in the global travel industry (it is also known as digital era) has already begun. So, those companies which operate in travel industry have a lot of challenges today.

For example, mobile booking channels have become a trend in the travel industry. Today, people can easily book airline tickets, sightseeing tours and hotels from their mobile devices. It is worth saying that this trend is especially popular business travelers. However, the number of travelers who prefer to take advantage of mobile booking systems is constantly growing. Obviously, in order to survive in the tourism industry travel agencies have to adapt their businesses to these new changes and innovations as soon as possible.

We can easily make a conclusion that the global tourism industry will continue to evolve the next year. Of course, it is still unknown how these changes will influence transportation costs in the nearest future. However, Caroline Strachan has made some predictions for the next year. She says that most likely that global travel prices will increase moderately in 2016. Time will tell!

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