Product pricing is an important issue for travel in 2009. A Twitter question from @AuthenticCoast prompts this question for discussion.
Please share your voice:
How do you respond to operators offering fire sale pricing?
Please comment.
conversations on experiential travel
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{ 4 comments… read them below or add one }
Prices fell across many industries in 2008.
Business Week 09/07 article
2009 will bring significant price pressure on tours and travel experiences.
With an industry in Canada that relies so heavily on domestic travel, there needs to be an enrichment in the travel experiences we offer in Canada.
In addition, tourism is one industry that already has low margins. Not interested in competing on price, but need to meet consumers demand for price sensitive offerings.
This is an interesting comment, Todd. Unfortunately, we often see operators react to difficult economic conditions by slashing prices rather than enhancing their value proposition. While guests may be getting a lower price, they may also be getting a lower quality experience. This creates a negative impression which makes it harder to attract repeat visitors to a region and difficult to attract new visitors who have heard from others of their less than desirable travel experience. And, as the low pricing creates margins that may actually be negative, the businesses who start the fire sale pricing ultimately can not survive. How can we connect with operators to have them focusing on enhancing the visitor experience instead of slashing their prices?
Tourism businesses that are based primarily on volume may find themselves in an interesting situation in that they may find reduced demand during these challenging economic times. The opportunity is to increase the value proposition so that your tourism offer is no longer comparable to other similar businesses.
By changing the value proposition (increasing the value, adding an experiential component, creating new components in the product or package), and by focusing on new niche markets, you may find new markets who want exactly what you are offering.
Summary: There are new opportunities for product diversification; finding new niche markets: adding value to the product and competing on value not price. People still want to travel. Those who are affected by economics may not travel at all. If price is the only basis for one’s product offer, then it may be time to re-think the business.
Tourism businesses that are based primarily on volume may find themselves in an interesting situation in that they may find reduced demand during these challenging economic times. The opportunity is to increase the value proposition so that your tourism offer is no longer comparable to other similar businesses.
By changing the value proposition (increasing the value, adding an experiential component, creating new components in the product or package), and by focusing on new niche markets, you may find new markets who want exactly what you are offering.
Summary: There are new opportunities for product diversification; finding new niche markets: adding value to the product and competing on value not price. People still want to travel. Those who are affected by economics may not travel at all. If price is the only basis for one's product offer, then it may be time to re-think the business.