2015 Flight Predictions: Expedia and Airlines Reporting Corporation Release Global Report Detailing Air Trends and Pricing for the Year Ahead

Travelers Can Expect Lower Flight Prices for North America and Europe in 2015; Fare Gap between Premium and Economy Seats Shrinking; Data Reveals Tricks for Cheaper Flights

News provided by

Expedia, Inc.

Dec 09, 2014, 09:45 ET

BELLEVUE, Wash., Dec. 9, 2014 /PRNewswire/ -- Expedia, Inc. (NASDAQ: EXPE), in partnership with the Airlines Reporting Corporation (ARC), today released a new white paper, Preparing for Take-Off: Air Travel Trends 2015, that analyzes a comprehensive set of global air travel data showcasing findings for travelers and those in the airline industry. This report represents analysis by Expedia, Inc.'s own data and data provided by Airlines Reporting Corporation, as well as other credible industry sources.

Specifically, Preparing for Take-Off: Air Travel Trends 2015 analyzes:

Potential price changes in airfare globally for 2015
The best time to buy airline tickets, based on historical averages
Differentiating value between economy and premium class tickets

"The combination of increased demand met by with increased capacity, coupled with lower fuel prices means one thing: It's good to be a traveler in 2015," said Greg Schulze, senior vice president, Global Tour & Transport, Expedia, Inc. "Our intent is that travel hacks coming straight from the Expedia air team, such as booking your hotel and flight together as a package to save money, will help make sure travelers know when to book, how to buy, and where to go."

Preparing for Take-Off: Air Travel Trends 2015 was months in development. The collaboration between ARC and Expedia gave both organizations a rich, unique data set to analyze.

"We were delighted to collaborate with Expedia on this important study as part of ARC's ongoing cooperative data program with customers and partners," said Chuck Thackston, managing director of Enterprise Information Management, Airlines Reporting Corporation. "Though several of the results in this detailed study confirmed ARC's earlier findings, Expedia went deeper with their own expertise and data to produce a well-rounded document."

Flight Prices to Expect in 2015
Analysis of flight data reported in Preparing for Take Off shows increased demand is met with increased capacity in such a way that these two factors largely cancel each other out across most destinations. Paired with a decline in fuel prices, though, and consumers should see slightly lower air ticket prices to most North American and European destinations in 2015.

That said, in the APAC market, due to increased demand from travelers and a limited supply on the carrier side, travelers should expect a rise in ticket prices in 2015.

Internationally, and most notably in Europe, the rising trend of low cost airlines continues to drive ticket prices lower due in part to the unbundling of services, thus prompting some of the legacy carriers to follow suit.

Expedia North America Average Ticket Price Forecast
	2015	2015 Jan-Apr
Destination	YoY ATP Forecast	YoY Capacity
Las Vegas	-4.4%	5.6%
New York	-1.7%	6.6%
Orlando	-1.8%	7.4%
Los Angeles	1.3%	5.9%
Chicago	-1.9%	5.1%
San Francisco	2.2%	3.7%
Cancun	-1.3%	15.2%
Washington	-6.7%	5.3%
Boston	1.6%	2.1%
Miami	-1.0%	7.9%
Denver	-4.8%	-0.1%
Phoenix	-1.9%	5.0%
Seattle	-2.1%	13.8%
Dallas	-11.2%	14.0%
Atlanta	0.3%	1.0%
Fort Lauderdale	-3.1%	5.9%
Tampa	-5.9%	9.0%
San Diego	-4.6%	5.3%
Newark	0.0%	2.8%
Houston	-4.5%	0.9%
London	4.5%	4.9%
Paris	0.4%	2.4%
Rome	6.0%	-5.8%

Sources: Expedia Internal Analysis, based on data from ARC, Diio Mi, and Expedia. Top city destinations based on tickets booked. ATP predictions are based on round-trip economy fares and inclusive of package tickets.

Expedia Europe Average Ticket Price Forecast
	2015	2015 Jan-Apr
Destination	YoY ATP Forecast	YoY Capacity
London	-4.6%	5.2%
Paris	-1.5%	4.8%
Munich	-2.7%	2.0%
Berlin	-4.4%	6.7%
Rome	-12.8%	10.5%
Istanbul	-0.6%	10.2%
Barcelona	-3.0%	4.7%
Copenhagen	-1.5%	2.5%
Madrid	-5.8%	12.9%
Amsterdam	-4.8%	9.1%
New York	3.3%	1.9%
Las Vegas	12.6%	-9.3%
Miami	5.9%	12.7%

Expedia APAC Average Ticket Price Forecast
	2015	2015 Jan-Apr
Destination	YoY ATOP Forecast	YoY Capacity
Hong Kong	0.0%	3.0%
Seoul	3.7%	7.1%
Bangkok	-0.2%	5.1%
London	1.5%	-1.6%
Tokyo	3.3%	6.5%
Honolulu	-0.2%	0.0%
Los Angeles	-3.4%	6.6%
Paris	2.3%	6.7%
New York	6.2%	11.7%
San Francisco	0.6%	4.6%

When to Purchase Airline Tickets – How Far in Advance and What Day of Week
Fares will vary on any given route and on any given day: There are no magic algorithms for flight booking. However, a look at historical averages reveals that flight prices are traditionally driven by two distinct measures of time: day of week and number of days until the flight date.

Expedia's analysis of its own data reveals that, by the slimmest of margins, Tuesday is holding onto its perch as the day on which air shoppers find the cheapest flights at purchase time. More important is the day of travel. International travelers who are able to leave on Thursday and return on Monday will enjoy the greatest savings on average. Domestic travelers opting for a long weekend can save up to roughly 25 percent on short-haul flights when booking a Saturday departure to Tuesday return over the more expensive Sunday departure and Monday return.

The Preparing for Take-Off analysis also shows, based on data from ARC, that on domestic routes, the lowest-priced fares should be found within 50 to 100 days of departure, while the lowest fares were found 57 days prior. Domestic flight fares tend to remain relatively stable during that 50-to-100-day window. For international routes, the lowest price fares are found farther in advance – between 150 and 225 days – while the lowest price found was 171 days prior to departure.

For routes originating and ending in North America, customers may save anywhere from US$195 to US$225 when booking flights more than three weeks ahead of departure.

Finally, booking a package deal almost always will yield greater savings; be sure to look at air tickets purchased as part of a vacation package that includes hotel and other travel services (such as rental car and/or activities). On average, travelers can save US$540 across all destinations, and even more when traveling to many popular resort destinations.

Package Savings for Select Markets**
	% Saved	$ Saved
Las Vegas	19.4%	$346.97
NYC	24.4%	$1,031.80
Cancun	22.9%	$942.23
London	18.5%	$588.55
Punta Cana, DR	18.4%	$774.04
Rome	17.2%	$499.57
Barcelona	11.6%	$217.55
Riviera Maya	21.9%	$1,019.24
Miami	19.6%	$496.51
Paris	20.8%	$898.91
Oahu	19.5%	$829.68
Los Cabos	24.6%	$950.26
Berlin	16.7%	$205.06
Orlando & Lake Buena Vista, FL	19.7%	$477.79
Los Angeles	18.4%	$371.45
Amsterdam	14.8%	$261.83
Chicago	19.3%	$332.18
San Francisco	17.3%	$392.87
San Diego	23.8%	$529.06
Mallorca Island	15.6%	$334.89
Istanbul	12.5%	$245.29
Maui	26.1%	$1,307.82
San Juan, Puerto Rico	17.1%	$379.53
New Orleans	16.4%	$329.88
Prague	12.5%	$189.44

Book Ahead for Flights to Atlanta and New York
Atlanta and New York have shown the largest advanced purchase savings. Hawaii, Mexico and the Caribbean, on the flipside, offer the slimmest savings for advance purchases. Hawaii is a notable anomaly; travelers often receive the best airfare deals when booking one to three weeks in advance. Last-minute deals are very often available, and one of the best ways to save is to book your flight at the same time as your hotel or rental car.

First Class Envy No More: Gap Between Fare Classes is Shrinking
Since the Pan-Am days, first class travel has always has always carried the perception of luxury and exclusivity. However, Expedia's analysis of flight data also found that in some cases the difference in ticket prices for seats in premium and economy cabins is shrinking, presenting the potential opportunity for consumers to purchase more affordable premium class fares.

On some routes, the gap between ticket prices in premium and economy cabins has become negligible, creating situations where tickets purchased for seats in premium cabins provide more value than economy tickets. Put simply, first-class experiences during domestic and international air travel may not be as unattainable as once thought.

For travelers in North America, the white paper notes the gap between premium and economy cabin ticket prices is larger, creating a potential opportunity for airlines in those regions to be more aggressive and attract new paying premium-cabin customers.

Download a complimentary copy of Preparing for Take-Off: Air Travel Trends 2015 at the Expedia Viewfinder Travel Blog.

About Expedia, Inc.
Expedia, Inc. is one of the world's largest travel companies, with an extensive brand portfolio that includes leading online travel brands, such as:

Expedia.com®, the world's largest full service online travel agency with localized sites in 31 countries
Hotels.com®, the hotel specialist with localized sites in more than 60 countries
Hotwire®, a leading discount travel site that offers opaque deals in 12 countries throughout North America, Europe and Asia
Egencia®, the world's fifth largest corporate travel management company
eLong™, a leading mobile and online travel service provider in China
Venere.com™, the online hotel reservation specialist in Europe
trivago®, a leading online hotel metasearch company with sites in 49 countries
Wotif Group, a leading operator of travel brands in the Asia-Pacific region, including Wotif.com, lastminute.com.au®, travel.com.au, Asia Web Direct®, LateStays.com, GoDo.com.au and Arnold Travel Technology
Expedia Local Expert®, a provider of online and in-market concierge services, activities, experiences and ground transportation in hundreds of destinations worldwide
Classic Vacations®, a top luxury travel specialist
Expedia® CruiseShipCenters®, a provider of exceptional value and expert advice for travelers booking cruises and vacations through its network of 180 franchise locations across North America
CarRentals.com^™, the premier car rental booking company on the web

The company delivers consumers value in leisure and business travel, drives incremental demand and direct bookings to travel suppliers, and provides advertisers the opportunity to reach a highly valuable audience of in-market consumers through Expedia Media Solutions. Expedia also powers bookings for some of the world's leading airlines and hotels, top consumer brands, high traffic websites, and thousands of active affiliates through Expedia® Affiliate Network. For corporate and industry news and views, visit us at www.expediainc.com or follow us on Twitter @expediainc.

About Airlines Reporting Corporation (ARC)
ARC powers the U.S.-based travel industry with premier business solutions, travel agency accreditation services, process and financial management tools, and powerful data analytics. In 2013, ARC settled $86 billion worth of carrier ticket transactions for more than 9,400 travel agencies with 13,000 points of sale. By providing world-class business services and products, ARC enables participating agencies and 200 carriers to focus on what's important—increasing revenue. Established in 1984, ARC is headquartered in Arlington, Virginia. For more information, please visit www.arccorp.com.

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SOURCE Expedia, Inc.