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LETS GET DOWN TO BUSINESS.

Question :
We have an accomodation business. We are looking at what will happen in the Christmas period. Do experts feel that price will become an issue ? And if so do you give discount or add on services ?

Question submitted 17/05/20 @ 04:41pm
Industry: Tourism
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  • Good question, forecasting future demand is super hard to do, especially with the sentiment around the market with the redundancies. However there is likely to be strong domestic tourism for the rest of the year in NZ. Personally I am not one for discounting, however to get forward bookings would i consider some type of commitment reduction or an extra night for a longer-stay booking – yes that is what I would do. Getting pre-commits seems to be sensible.

    Hi there,
    I am on the board of a tourism RTO and we are advising tourism operators to try to maintain price, but offer add-on’s or package up a deal with other operators.
    If you need to offer a deal, don’t discount the upfront single price… perhaps 2 for 1 or kids go free…
    It is a slippery slope and a race to the bottom if everyone take the knife to price in the first instance.
    Also, there are many yield management techniques you may wish to follow – take a few discounted early-bird bookings and then build up price as your booking curve strengthens, and then offer targeted offers towards ‘last minute’ bookings nearer to Christmas if this strategy doesn’t work.
    I’d be making sure you make the most of your social channels to to promote your business and secure early bookings… A lot will depend on Australia as I am a little concerned what the summer will bring as most kiwis are relatively habitual in choosing where they go.. so the trick will be enticing them to somewhere new over Christmas… also, targeting the right customers at different periods of summer… clearly family over Xmas and weeks after, but then what target groups would pick up the normal Feb/Mar/April international segment… likely boomers and retires for weekday and families / workers for weekend traffic

    Great advice from Andy and Jonathan, I am guessing you might be in Ohope Beach from your user name… the Bay of Plenty has a very low number of international visitors normally anyway, and NZ also sees a dip in international visitors over this time as many people around the world prefer to stay at home with family during this time. (It is traditionally a quiet period for hotels around Xmas and NY). If so I guess that you could expect similar demand to normal around this time where you are…

    Kia ora Ohopedude,

    How much of your Xmas/NY peak is domestic vs. inbound? Let’s assume Jason’s right here and your business is largely domestic…

    I’d hold off any discounting at this point. Keep an eye on the next few months and see how it tracks compared to previous years. I can’t see why NZ domestic won’t largely fall back into similar travel patterns albeit with a lift due to increased domestic travel (less overseas trip) counteracted by a drop in those who’ve been hit hard, and may have to scale back on holidays as a result.

    If alternatively, you’re having to shift market from inbound to domestic then it’s worth digging in a bit deeper and taking a look at your offering for the domestic traveller.

    All the best,
    -Peter

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