2014 Outlook on Travel and Hospitality

In 2013, the UK government increased the Air Passenger Duty (APD) tax to a maximum £188 per person (vs. £92 in 2012) for long-haul premium flying. Similarly, Spain introduced a nearly 19 percent average hike in airport tax. These higher taxes are expected to be passed on to customers, and could ultimately redound negatively to those U.S. airlines that serve those European markets.

Hospitality companies should consider building enduring customer loyalty and delivering a differentiated brand experience during this phase of gradual economic recovery. While many companies appreciate the importance of loyalty programs, only a few have managed to derive significant returns, indicating the need to reengineer loyalty programs.

Although disposable income continues to rise in the BRIC countries, growth in these regions is sluggish.2 Hoteliers should consider focusing on under-utilized, “beyond the BRICs” markets such as Burma, Cambodia and Vietnam, as well as other high-potential countries such as Turkey, United Arab Emirates (UAE) and South Korea, with well developed infrastructure.