Navigating turbulence: An executive’s guide to travel in 2024

Euan McNeil, Managing Director of Flight Centre Travel Group South Africa

Despite high travel prices, demand is still resilient, according to Flight Centre

As South African travellers look to take flight in 2024, stormy economic conditions could threaten to shake up the journey ahead. Yet for Euan McNeil, Managing Director of Flight Centre Travel Group South Africa, the resilience seen so far across both leisure and corporate travel spend paints a picture of cautious optimism. 

“Demand continues to be resilient, which is quite surprising,” McNeil stated in a recent conversation assessing what’s next for the travel sector. He highlights that while discretionary income is undoubtedly squeezed across many households, travel remains such a priority that people continue finding ways to afford annual holiday getaways or business trips crucial for sealing deals.

However, as airfares across domestic and international carriers remain elevated compared to the pre-pandemic era due to a range of macroeconomic headwinds, misguided expectations around pricing could create frustration for travellers unaware of all the dynamics at play.  

Here, McNeil breaks down what will really drive costs and booking strategies for air travel in the year ahead.

Making sense of elevated airfares

Across leisure and corporate travel sectors, the shock factor around the new normal pricing level has largely worn off. Travellers have grown accustomed to paying more, whether flying overseas or on domestic carriers compared to 2019. However, the factors keeping airfares up in 2024 may still prove surprising.

While South Africa grapples with skyrocketing inflation, rising interest rates, load-shedding woes and volatile currency exchanges putting the pinch on households and businesses alike, airlines also face their own cost pressures that won’t provide much relief for ticket prices just yet.

According to McNeil, the core issue comes down to airline economics and the US Dollar. He explains: “The biggest costs for airlines are all dollar-based. Fuel is a third of overall costs and that’s priced in dollars. As the Rand weakens, their income doesn’t stretch as far even as travellers pay more.”

With the strong dollar also making imports of aircraft parts and services pricier, don’t expect the laws of supply and demand to drastically slash airfares anytime soon.

Insider tips to beat the odds

Does this possibly cloudy forecast mean travellers should simply stay grounded in 2024? Not necessarily. For corporates aiming to keep business trips and air travel budgets under control, and households hoping to still indulge in an annual holiday, smart planning and insider tips can provide an advantage in navigating higher fares.

McNeil says: “People will have to travel smarter — good flight deals won’t always be what they seem, and expert advice will be key.” He notes that in some cases, travellers may opt to extend trips by a few days rather than paying for additional flights to multiple destinations in one trip. Trust a travel agent to maximise your holiday investment versus going at it alone.

Perhaps surprisingly given the above, globally, Flight Centre continues observing a pronounced shift towards increased premium travel, with demand for business class surging higher than pre-pandemic benchmarks. Travellers should account for these trends, booking further in advance to secure preferable cabins or considering upgrading airport lounge access to maximise value from the overall airfare spend. 

Weathering the turbulence ahead

For travel industry leaders like Flight Centre and travellers across the spectrum, 2024 promises continued growth despite the economic storm clouds gathering. “I don’t think we’ll see massive expansion, but rather airlines focusing on protecting and optimising current routes where possible,” McNeil summarises.

While visa barriers, unpredictable exchange rate swings and rising inflation present very real challenges, McNeil believes South Africans’ deep affinity for travel should ensure smoother skies ahead. “There are lots of surveys showing consumers will sacrifice other discretionary spends before giving up their annual holiday, recognising the significant wellness impact of quality time spent away,” he says.

With some smart planning, and a good travel agent on call, corporate and leisure travellers can still rack up the air miles in the year ahead – even if the ride is a little bumpy at times. 

For more information, visit: https://www.flightcentre.co.za/