Travel and tourism brands should look at new ways of pricing their products to help attract visitors and promote loyalty as the recession bites.
According to World Travel Market’s Global Trends Report, produced in association with Euromonitor and released today, new pricing models are beginning to make inroads in the travel industry.
Sandeman’s New Europe Tours is offering customers free tours as a showcase for the paid tours. In Berlin, the free tours have a referral rate of 45% for the paid product.
Similarly, in the accommodation sector, Priceline invites customers to name their price for a hotel room in a blind auction. This strategy promotes customer goodwill and increases the chances of them returning.
The idea of a ‘pay what you want’ model first reared its head in the music industry when Radiohead allowed customers to decide the download price of their album In Rainbows.
Meanwhile, the ‘core free goods’ model where the basic product comes for free but extras are paid for is most commonly used by low-cost airlines. However, it is also catching on within the hotel sector in the UK.
Travel Offers features 320 hotels where accommodation is free, but guests have to pay for dinner and breakfast and a £35 annual fee.
According to the report, travel companies should be making full use of the internet to introduce these promotions rather than simply using it for marketing activity.
The report says travel and tourism players need to realise that: “More and more potential customers will become accustomed to naming their own price or expecting a major portion of the product or service for free.”
“As the level of economic activity is likely to be dormant at best until 2010, many players will have to work harder to attract the attention of customers. And nothing grabs the attention better than the word ‘free’.”
- Date: Tuesday November 11
- Time: 11am – 12pm
- Location: North Gallery Room 8