TOURISM MATTERS: We have no choice but to lower our prices
WHILE I DID NOT ATTEND the Barbados Hotel and Tourism Association’s annual general meeting recently, if media reporting was accurate, the current chairman is quoted as stating that “discounts were not the way to attract visitors to these shores”.
I have enormous respect for Mr Chatrani (despite his opting not to join the re-DISCOVER initiative) and in principle totally agree with this statement, but in reality, we have a mountain to climb to change the current perception.
Sadly, across many of our markets, we are generally considered as not offering value for money in our tourism industry and until the sector becomes more competitive this simply will not change.
As a tour operator in Britain for 12 years, we learnt from the mistakes of others and did not discount a single holiday out of hundreds of thousands sold, other than for people booking and paying in full up to 18 months prior to departure.
The year our company was formed, 1976, interest rates peaked at 15 per cent per annum and so we used our customers’ monies to partially subsidise commercial bank lending charges to grow the company.
Every person who booked also knew that they were not going to get a cheaper holiday if they waited until the last minute, so to get the holiday they wanted, necessitated booking earlier and enabled us to plan better.
It was a policy that we continued while operating our small hotel for 25 years. If we are going to achieve Mr Chatrani’s objective, we are going to have to fundamentally change the way we currently do business. As an example, if you take Sandals, the often vaunted “masters” of marketing, they apply a markdown to almost every aspect of their product.
Go on their website and prices are largely discounted by up to 65 per cent and that’s before you take into account an air credit of US$1 000, resort credit of US$215, one night free (on certain rooms) and a further US$35 for booking online.
For many, perhaps this might indicate the massive discounting is presenting the opportunity of a bargain. To me, I am afraid it just tells me that the original rates quoted are grossly over-priced.
I believe we have to get across the concept of offering a product that is truly value for money rather than maintain a second hand car selling approach that tends to appeal more to a transient, fickle segment of our potential customer base.
But saying and doing this are two different challenges. Discounting has become an ingrained component in the travel and tourism industry and the practice isn’t going to disappear in the short to medium term. Also, in the case of Barbados, it cannot be achieved by the private sector alone.
Government has to be an integral part of the process and ensure the promised concessions are fully implemented before there will be any meaningful progress on the building block recovery road to viability.
Until that is done, we are frankly left with no alternative or opportunity to avoid being forced sometimes to sell our product below its actual cost.