Comments on: Why Discounting Won’t Work to Survive this Recession

By: Tyson

Tyson — Fri, 05 Jun 2009 18:14:48 +0000

Anna -

Well written post and you definitely raise some good points. In general I’m a big supporter of yield management for tourism companies and I believe that when done right it provides a revenue boost without undermining brand equity.

I posted a pretty detailed counterpoint over on my own blog:

http://travari.wordpress.com/2009/06/05/discounting-tactics-for-adventure-travel-operators/

By: David S

David S — Wed, 06 May 2009 16:44:54 +0000

The problem is that we have to re-discover ways to balance the value equation (what consumers get for what they pay). As we all know, price is only part of the value equation. However, if a tourism operator does not have the will or the means to increase the value of his offering, his only recourse is to re-balance the equation by lowering his price.

I think the reality of this new economy is that for the past few years, demand so far outpaced supply that it was a seller’s market. Operators got sloppy when simply opening their doors meant unrealistic profits. Now the demand side has so drastically been reduced and operators seem to have forgotten how to compete, other than with price.

By: Jose Philibert

Jose Philibert — Tue, 21 Apr 2009 04:15:41 +0000

I continue to believe that price wars are not advisable in marketing during difficult periods. Our Mauritian Tourism Industry is keeping its resilience through hard work, devotion and promotion, while bettering the offers with additions to packages and continued improvements to the destination. JP

By: Anna Pollock

Anna Pollock — Tue, 14 Apr 2009 12:01:36 +0000

Thanks for reading and commenting on the post Claude.
Sadly, it’s the independently owned, small to medium-sized hotel that is most vulnerable in such recessionary times. They face tough competition from the chains whose discounting practices result in starred properties being sold for the same or less than the independents, who do not enjoy the same economies of scale when it comes to purchasing etc. Their survival strategy should be deployed in boom times - provide the best possible personal service and create genuinely loyal relationships among their guests. It’s the character of the small independents that contributes most to a destination brand…Cheers Anna

By: Claude

Claude — Mon, 13 Apr 2009 13:31:36 +0000

Anna,

Thanks for this great post.

I am convince a good social media and travel social media strategy can make a strong difference with your position in Google Universal Search, as I explain some months ago in my post in your blog :

Google Universal Search and your travel industry business. Are you ready?
see here http://attractionstourism.com

it could be interesting to see if ComScore have new data about the market share for Google Universal Search.

Best regards

Claude

By: Lee Dunbar

Lee Dunbar — Sat, 11 Apr 2009 13:28:05 +0000

Your comparison of “de Beers slashing the prices of their diamonds” is somewhat faulty. While de Beers may not “slash the prices of their diamonds” as a dealer in a wholesale commodity, retailers selling end products using diamonds certainly do - and they are the more comparable of the two.

While your points are very well-taken and certainly subscribe to mainstream thinking, cash flow is king. You can manage your consumer channels as much as you want, but there are times when you may need extra motivation. Discounting or adding value in some way may be the difference - but clearly the initial motivation or intention needs to be there.

I might be thinking about going to Disney, but I am uncertain. Wow, free dining plan! That might put me over the top. I might be thinking about going to Niagara Falls. Wow, free passes to the indoor waterpark. That could just do it for me.

Discounting/value adding might seem like the seemly underbelly of the industry, but at certain times, done right, it is a necessary and effective tool.

By: Claude

Claude — Sat, 11 Apr 2009 08:22:43 +0000

Anna, thanks for this great post and large views.

Discounting is a easy behaviours for many operator. In fact you can discount, but you have to be cleaver and do it in a good & smart way( as you say for discounts to employees’ networks of friends…)

For mid size and big hotel chain, I think they can have ressources and tool to handle the crisis.

But for small hotel (25 rooms, with no CRM, simple website and simple booking engine, no channel manager, no dedicated sales team, etc, …) how they can find a way to be in the market?

Their first reaction it’s to make discounting ;-(

Best regards

Claude

By: Why Discounting won’t work to survice this Recession | Chameleon Strategies

Fri, 10 Apr 2009 08:16:14 +0000

[...] Pollock wrote an insightful article, titled “Why discounting won’t work to survive this recession“. Check it out, and we would be interested in your comments. The Tourism Internet Marketing [...]