STRONG demand for inbound and outbound travel on the back of a strong tourism and travel sector will lead to a second-half airfare increase of 3 per cent on key routes from Adelaide according to the latest research from Flight Centre Travel Group’s 4th Dimension Business Travel Consulting. 

Corporate hotel rates are also set to rise in 2019 in hotels with high occupancy levels due to steady growth in demand for accommodation and only nominal growth in room supply.

The findings are the result of a benchmarking study that compares tickets purchased from Flight Centre Travel Group’s corporate and retail businesses from the first-half 2018 compared to first-half 2017.

Jody Loomes, Corporate Traveller’s General Manager SA said the forecast fare increases comes off the back of rises experienced so far in 2018 which have been driven by strong consumer demand, steady tourism growth and gradual increases in carrier published fares.

Corporate Traveller, part of Flight Centre Travel Group, provides business travel solutions to the growing SME sector.

“Adelaide is the fifth ranked business airport in Australia for domestic and international passengers, and what makes it so different is the heavy domestic passenger flow that we have,” Mr Loomes said.

“It is a city paused for more growth with international travellers in the coming years which will be fuelled by tourism, education and the meetings and events industry.”

Mr Loomes said the commencement of the Adelaide Airport expansion comes at an opportune time as additional international services are considered including a possible return from Malaysian low-cost carrier, AirAsia.

“Our competitiveness will be heavily influenced by our facilities,” he said.

“Business travellers are continually telling us they prefer direct services to destinations in Asia and to the West Coast of the USA instead of regularly transiting through Melbourne and Sydney.”

Qantas served 38 per cent of Adelaide’s outbound domestic seats, followed by Virgin Australia with 30 per cent and Jetstar Airways 18.5 percent, which was consistent with the first half of 2017.

In the first half of 2018 there were more than 4 million inbound and outbound passengers through Adelaide Airport consisting of 88 per cent domestic and 12 per cent international.

Travelling for holidays and visiting family and friends are the top reasons for visiting South Australia followed by travelling for business.

In the past six years there has been a 59 per cent increase in international passengers in and out of the airport terminal, largely fuelled by the entry of Emirates in 2012, Qatar Airways and China Southern Airlines in 2016.

Currently nine airlines provide international services from Adelaide: Cathay Pacific, China Southern Airlines, Emirates, Fiji Airways, Jetstar, Malaysian Airlines, Air New Zealand, Qatar Airways and Singapore Airlines. Collectively they offer 44 weekly flights to nine international destinations.

Accommodation Investment Meets Increased Room Demand

Looking ahead into 2019 the report found that the hotel market movement is mixed with some properties holding rates while others implement rate increases in line with strong demand and limited supply.

4D’s report revealed that for the year ended June 2018 Adelaide’s hotels enjoyed an occupancy rate of 80 per cent, up 2 per cent from the prior year.

Jody Loomes said that investment in new hotels will increase Adelaide’s 5-star room stock as new projects are completed in late 2019 and early 2020, including the Crowne Plaza opening inside Frome Central Tower One, which when completed will be Adelaide’s tallest building.

“Tourism growth and a surging convention sector are being complemented by new investment in our accommodation sector,” Mr Loomes said.

“The newly opened Atura Adelaide Airport hotel, adding 165 rooms, is a welcome addition as Adelaide’s first airport hotel.”

Mr Loomes said that in the near term, accommodation constraints in the city were being felt this September and October with several large conferences being held.

“Our advice to business travellers is to book early and consider suburban accommodation options including Glenelg, the airport and on South Terrace,” he said.