Why are so many travel businesses undervaluing what they do, asks Amanda Matthews, managing director of Designer Travel
I know January is a key month for almost every travel business, but do we really need to drop our trousers so much?
I have asked myself this on a daily basis this month – why would they sell at that price? I am sure that you will have asked yourself a similar question often. If I am not on my own on this, why do so many businesses do it? Why are so many of you undervaluing what we do?
Cost-cutting
Here are a few examples that I have encountered recently:
- Thomson discounted Christmas holidays in the Dominican Republic online by almost 10%, despite its competitors having little availability. Why? Wouldn’t adding 10% have made more sense? Does it have concerns over the real value of its products?
- Sovereign has historically offered 5% off online, but this rose to 12% in January. Supportive retailers have had to change tack. Why did Sovereign do this?
- Thomas Cook has spent the past month offering discount codes across a range of social media channels, yet still says it’s a level playing field. We find out from clients, not Thomas Cook. Why?
I could go on and on. My point is not about what strategies companies have in place, it is about looking at the bigger picture.
It appears that travel companies adopt a ‘one size fits all’ approach – simply discount everything or work on a fixed margin for everything.
Surely it would be more sensible to look at each channel/element on its own. When Tesco offers 50% off a chocolate bar, it doesn’t give 50% off everything in the shop.
If we carry on behaving like this, clients will come to expect that we will always sell on price. Another consequence is that we will lose talented people from our industry.
Get what you pay for
At Designer Travel, we don’t sell on price. We tell customers that we will be competitive but won’t be the cheapest, and will look after them from start to finish.
We aren’t a faceless contact point. We care and we will make sure that they get the holiday that’s right for them.
We price each holiday based on what we know about the client, and we earn enough to survive and retain valued customers.
We were lucky enough to be 30% up in January, we kept most existing customers, and we brought in lots of new ones who appreciate good value and an experienced travel service.
For those that have aired the issue on forums such as Travel Gossip, let’s stop asking ‘why?’ and start asking ‘what are we going to do about it?’.
We may have to look at working more closely with hotels so that we can cut out the middlemen, such as the suppliers who want our customers for free.
Suppliers need to sometimes have a think about who really is the ‘middleman’. It could be an interesting outcome.