Truth in Travel Pricing
None of us should be surprised at these quotes from a travel article in the TimesOnline.co.uk (Oct 2008) by Stephen Bleach:
“Massive discounts on cruises were exposed as a con last week after leading line Fred Olsen admitted it had not sold a single cruise at full price for a year.”
A further quote from the managing director of the line, Mike Rodwell:
“the big American operators started it and the rest had to follow.”
Another surprise. On the same laptop page as this excellent article were three Google ads offering:
“Cruise Deals. Search The Top Online Cruise Deals. Read Reviews & Book Online Today.” Followed by:
“Cruise Discounts 75% Off, All cruise lines, all destinations.” And another:
“Huge Alaska Cruise Sale, Free Upgrades, Exclusive Deals & More with Guaranteed Lowest Prices!”
The travel operators behind these advertisements must think the travelling public is naive or even stupid but they would probably not use them if they did not work.
Also, these Google ads were run against a very negative, but truthful article about misleading advertising for cruises.
The travelling public continues to be treated with disdain by travel operators and advertising companies, not only by cruise lines and airlines but by all types of travel suppliers. What could be more misleading and false advertising than an airline advertising their fares in headlines that shout out:
“$49. one-way to Smithville” IN LARGE PRINT, and then:
‘based on return purchase, plus all taxes, surcharges for fuel, surcharges for security, checked baggage is extra, seat selection fees, and on and on and on.” And by the way, have fuel surcharges been reduced enough?
Not only cruise prices and airfares but also consider hotel pricing that often requires much investigation as regards the offered discounts:
“75% off! But off of what? A rack-rate that is rarely charged?
And, why can you often get cheaper rooms at an online reservation office than at the hotel front desk even when you are in their lobby and ready to book?
Next in line for pricing questions could be the packaged holiday market. How many of these are sold at the brochure price? Or, as with the above cruise line, are packaged tour operators simply following the lead of others?
Not only is the public being mislead by questionable advertising and pricing practices but once captured by a cruise line, airline or packaged resort operator they can be open to additional gouging whilst onboard the ship, aircraft or resort.
Apart from the onboard costs of alcoholic drinks which should be at duty-free prices (i.e. cheaper than onshore). Extras, such as shore excursions can also be more expensive when purchased onboard rather than ashore or even pre-departure using the internet. Similarly with resorts that have onsite booking agencies for off-resort activities. The prices are often cheaper when purchased directly from the operators or again at pre-departure directly over the internet. Airlines however, who are charging for all sorts of basic amenities from blankets, pillows, soft drinks and soon even water may not be free, have a more captive audience (the movie, ConAir comes to mind) and will continue to be the most reviled part of the travel experience.
There is hope for the future but so far only in Europe. In 2009 new rules for advertising standards will come into effect offering more protection for travellers. We must hope that these new rules will eventually spread to the rest of the world with further improvements to protect consumers worldwide.
In the travel industry. Where has the originality and creativity gone? Where are the leaders? Where has “lead, follow or get out of my way” gone? Only the followers know.
Another aspect of travel pricing is when consumers want to handle their own travel arrangements directly with the operators of hotels, lodges, tours and transportation. The pricing should reflect the fact that the products are being purchased directly from the source and not at the retail level. In other words, reduce the price by the commission that would have been paid to an agent, broker or retailer and give the traveller a direct booking discount. This action could encourage more travellers to make their own direct bookings, leading to more business and a competitive edge for the operator.
Of course, the traditional distribution channels have to be protected as many consumers require help and assistance and as yet not everyone has or wants the internet.
Travel providers do not normally show different prices on their websites as this could lead to potential clients seeking advice at the retail level and then booking directly with the operator to get a discounted price. It is unfair for retailers to lose their commissions when they have performed services for their travel-trade clients.
Consumers on the other hand, if they do not need expert advice or booking services, should have the opportunity to go directly to the source and get a direct booking discount.
Originality and creativity has returned to the travel industry. Travel providers are now able to offer travellers a direct booking discount service by using a new travel voucher system that has been introduced. With a website and the internet they can now reach out to the global travel community, not just travel agency or local traffic.
Any travel operator, from the smallest b&b to the grandest lodge or luxury tour, can offer this service. The voucher values represent the normal commissions that would have been paid out to sellers of travel but now will be given back to the buyers of travel. And, the discounted price does not have to show on their websites.
The service is leading with this new initiative and now wants to promote the thousands of small travel providers and other businesses around the world that do not use selling agents and therefore do not have sales commissions built into their pricing. The operators of the voucher service suggest that lower yields with higher volumes of direct booking discount travellers may achieve better overall returns.
Members of a new online travel club can get these vouchers free with membership and non-members can purchase them at deep discounts to their face values at another similar website. At present there are vouchers covering travel in over seventy countries from b&b’s to adventure and luxury tours.
The Club operators say that they do not charge businesses for listing their services as long as they participate in issuing vouchers enabling members to get direct booking discounts.
There are many directories linking the world of travel to the world of travellers but this new concept offers a directory with discounts on every travel selection if you are willing and able to handle your own travel bookings and arrangements directly with the listed operators.
The club operators are aware that many travel operators will continue to adhere to the business style of Mike Rodwell of Fred Olsen Lines and will continue to follow rather than lead and it is unlikely that they will ever be represented by this travel club. They are also aware that there are enough independent travel businesses that will find that their new business style of expanded selections and direct booking discounts is a better way of offering travel directly to consumers around the world.
You can find out more at the website of TheTopTravelClub.com.
About the Author
A UK Chartered Accountant with over 40yrs of international travel and over 25yrs in the travel industry. Editor of http://www.thetravelinsider.net and developer of the TopTravelVoucher service at http://www.thetoptravelclub.com
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