kabarsula Economy airfares soar 21 per cent as FCM warns of further hikes in 2027 bandar SLOT INDONESIA

Economy airfares have risen approximately 21 per cent so far in 2026, with further increases expected next year as airlines pass on higher fuel costs, according to a new report from FCM Consulting.

The Trends & Strategies for H1 2027 report warns that rising costs and ongoing disruption are putting pressure on corporate travel budgets, prompting businesses to reassess how they measure the value of work-related trips.

While airfares continue to climb, hotel prices have shown signs of stabilising. Global average hotel rates fell to US$216 in the third quarter of 2026, just 0.9 per cent above the same period last year, after reaching a five-year high of US$223 in Q2.

FCM Consulting, part of FCM Travel, said companies must move beyond traditional cost and compliance reporting to demonstrate how business travel contributes to commercial objectives.

“Every business trip is an investment in a customer, a deal or a team,” FCM Travel chief customer officer Jo Lloyd said.

“When travel managers can show senior leaders why each trip happens and what it delivers, managed travel is seen as a strategic asset, and it’s easier to invest in the trips that matter. Our job is to help clients build that case.”

Four gaps businesses need to address

The report identifies four areas where corporate travel programmes are falling short, including measuring travel’s return on investment, AI governance, negotiated rates and disruption preparedness.

The first, described as the articulation gap, highlights how traditional travel reporting focuses on expenditure rather than the business purpose behind each journey.

FCM recommends incorporating trip objectives into booking processes to help companies assess spending against broader commercial priorities.

The second concerns AI governance, with the consultancy warning that businesses need clearer oversight as artificial intelligence becomes more widely integrated into travel management.

“A strong approach is fail-safe by default: when there isn’t a compliant option, AI should stop and pass the decision to a person,” FCM Consulting strategy lead Felicity Burke said.

The report also highlights a disconnect between negotiated travel rates and what companies actually pay.

FCM data shows 42 per cent of business travellers in the Americas book outside company travel policies, while just 56 per cent use approved booking tools.

Meanwhile, negotiated hotel rates with last room availability are accessible between 60 and 85 per cent of the time, compared with 25 to 50 per cent for rates without that provision.

“The actual rate achieved is the best measure of how well a negotiated rate is performing in the programme,” FCM Consulting global hotel practice lead Rachel Newns said.

Disruption remains a major concern

The fourth gap focuses on disruption readiness, with the report pointing to ongoing operational challenges across global aviation.

Airline seat capacity in the Middle East has declined 10.7 per cent this year, while nearly a quarter of European flights experienced delays in 2025.

US airline on-time performance also fell to its lowest level since 2014, according to the report.

Meanwhile, the European Union’s Entry/Exit System has contributed to longer airport queues, with processing times increasing by as much as 70 per cent at participating airports.

“Before they set off, travellers should know how to rebook and who to contact if something goes wrong,” FCM Consulting strategic advisor, market intelligence Juan Antonio Iglesias said.

FCM also warned that unmanaged hotel bookings can make it harder for companies to locate employees during disruptions, reinforcing the importance of treating travel policy compliance as a safety consideration rather than simply a cost-control measure.

The consultancy concluded that greater visibility over travel spending, booking behaviour and trip objectives will be critical for businesses seeking to maximise the value of corporate travel in 2027.