While intercontinental business fares continue to climb, domestic economy fares in the US are falling, driven by low-cost carrier competition and weakening demand, according to the Advito Travel Price Index for the second quarter of 2025. The index is a predictive analysis of airfare and hotel rate pricing trends. Hotel rates, according to the index, are leveling off globally.

Among the findings in the index:

• Intercontinental airfares are on the rise. The strength of corporate travel recovery combined with the attraction for premium cabin options are driving fare increases in business cabins.
• Geopolitical tensions have an impact on intercontinental airline networks and can contribute to fare increases especially from/to Europe, Middle East and Asia.
• Enforced capacity discipline is emerging as a significant trend impacting airline growth strategies. This is due to delays in aircraft deliveries and maintenance issues.
• Domestic and regional fares in economy cabin are showing mixed trends. Economic concerns are starting to hurt travel demand in the US domestic market. A highly dynamic Asian market has led to a double-digit increase in seat capacity, greater availability of lower fares and a reduction in average fares.
• US domestic economy fares are starting to decline, influenced by the increased activity of low-cost carriers and rising uncertainty in the current economic environment. In contrast, US transcontinental fares, particularly in business class, are experiencing solid year-over-year growth.
• The easing of leisure and business travel demand is driving more moderate hotel cost increases in many markets as we move into the second quarter of 2025.
• According to STR benchmark data, occupancy levels have increased year over year in most regions except Asia. Revenue per available room (RevPAR) as reported by STR has started to increase across all regions.
• Most markets are seeing moderate best available rate (BAR) increases, except for Houston, which is facing double-digit increases.
• Most Canadian markets are experiencing decreases in BAR year over year and quarter over quarter. BAR increases in Houston, Charlotte, Washington, DC, and Oklahoma City contributed to the overall price hikes in the US. North America occupancy levels are trending marginally above 2024 levels

The report also offered a number of recommendations for travel managers, including (for air):

• Be clear about which airline fares, benefits and services are important to your program.
• Ask airlines about their roadmap to develop the services you need. Involve your distribution stakeholders (TMC, GDS, OBT) in the discussion to accelerate progress.
• Focus on total air spend. The landscape of carrier-imposed charges is becoming less transparent. The latest addition of distribution cost charges and environmental surcharges has made these extra costs harder to understand (and account for up to 20% of the ticket price).

For hotels:

• Advito’s analysis shows that companies leveraging multi-source content can achieve an additional 2-5% in savings—optimizing spend without compromising traveler experience.
• Don’t lose sight of your current program. Are your negotiated rates delivering the expected value? With suppliers increasingly shifting toward dynamic pricing, it’s essential to continuously evaluate rate performance to ensure alignment with your savings goals.
• As market conditions evolve throughout the year, it’s crucial to monitor these trends and be ready to challenge underperforming rates. Regular benchmarking and analysis will help identify opportunities to renegotiate, shift strategies, or diversify rate types to maintain program effectiveness.