pricing Archives

Clear experience on Pricing in Tourism is more important than ever Introduction by Carolyn Childs, CEO: Back in 2013, MyTravelResearch.co Co-Founder Bronwyn White wrote a piece reflecting on the potentially $30,000 loss a poor experience on tourism pricing had cost a domestic caravan park. As part of our regular review of content, we recently went back to this piece with a view to whether it still had relevance. At MyTravelResearch.com we pride ourselves on producing evergreen content, but seriously the points in this 8-years-old article would all apply exactly today. When every dollar in revenue and every saving on marketing costs is more vital than ever, a clearer, more transparent and more inclusive pricing approach is a critical business tool. We've edited the piece for length and added some additional insights. The great family holiday is 'same, same but different' I have just come back from a good old-fashioned domestic tourism caravan park on the beach Aussie family holiday. We had the most wonderful relaxing time and all got to know one another again. It was the type of holiday some of us grew up with. Back when I was a kid, we stayed in on-site vans. Then Dad got a job as a sales rep for Jayco in the late 70's when the pop-up was all the rage. We always had the latest pop-up to try, great times. I have such fond memories of these types of holidays. You would be reunited with the same kids every year at your regular caravan park and run riot all day. And we were always in search of a Caravan Park with the best trampoline. These days, I am all grown up with kids of my own. I am hoping to give them the same great Aussie caravan park culture experience year after year in the Summer holidays to come. And now it seems, we have the 'deluxe' cabin replacing the onsite van and the 'Holiday Park' replacing the caravan park. The challenges on pricing are sadly just 'same, same' At certain times during our family holiday I was back in the countless family travel focus groups I have moderated in regards to domestic travel. Both Carolyn Childs and I have worked extensively in this area for many years - in fact, we developed Domesticate back in 2006. But this was my first holiday where I have evolved from the DINK to the Family to experiencing it. Thinking back to all the family travel research we have done, I want to specifically revisit how pricing is still an area that provides opportunities for tourism businesses to stand out and generate new business. We were lucky to stay at one of the most beautiful beaches in the world on the NSW Coast (Australia). We chose a caravan park we have been visiting for around 20 years or so. Chris, my husband used to go there. Then we met and went as a couple. We were hoping to continue the tradition. And this time, we were going to our special place as a family. Confusing pricing is a barrier to domestic conversion We have gone from a couple to 2 adults and 3 children pretty rapidly...Our twins are 4 years old and my older daughter is 5. Going on holidays and getaways was all pretty straightforward as DINK when it came to pricing, but this time around, I found I was living the focus group. This is not an exaggeration, but pretty well every family focus group, we have moderated over the last 8 years or so raised the issue of the confusing pricing structures when a family wants to travel within Australia. This is one of the main attractions of an overseas holiday, particularly for families. Over and over again people say "with overseas holidays or a cruise, we tend to know what we are paying upfront, no little surprises, no asterisk or extra costs". This is common customer perception and continues to be so of a holiday in Australia. Here is my personal story to add to the equation. We called in April to book our January holiday. The park quoted is a rate for the cabin at $183 per night. When it came time to check out, I was advised that it would also be $12 per night per child. This added up to $36 extra per night over 7 nights - an extra $252 to our week. So the per night cost was now $219 per night instead of $183. This was a bit of a surprise. Keep pricing transparent and simple I had received a confirmation letter in the middle of the year, stating I had booked 7 nights in an executive cabin at $183 per night. So my assumption was that was the price, why wouldn't it be? It said that was the price for the dates. They also slipped in an A5 rate card - no referral to it in the letter. Now, I want to say, there was a pricing table on the card statement with the famed **asterisk (the asterisk is also a hot topic in every focus group). I didn't look at the A5 card properly when I received my letter back in April. Mistakenly, I thought I had all I needed in the 'confirmation letter'. At check out, they pointed out to me that 'the card says' that there was an extra charge per child. But this wasn't obvious to me and was different from what was in my letter. Remember customers aren't looking at these things like you are On reflection, I had read my confirmation letter with the dates and the price of the cabin. In my view, I was good to go. I didn't really see the thing about the kids on the rate card. I'm not sure how or why I missed it but I did. My point is that it was not straightforward; it was confusing and I missed it. Perhaps it was me. But so d0 many participants in our focus groups. The other thing was, they told us to bring BYO bedding and towels. So, this was doonas, sheets, pillowcases, beach and bath towels for 5. This takes up an enormous amount of space. We are not campers with space-saving sleeping bags, but cabin goers. Take feedback kindly I mentioned to the operator (in a friendly tone) that I was in the industry and in my experience that extra nightly costs for bodies generally correlated with the need to bring in a rollaway and bedding, usually from an outside company and this I could understand. They then replied 'why should a couple pay the same price as a family?' Hmmm. Interesting. Kind of killed the mood. Remember the customer has a choice During the holiday, we went for a drive - this is something I love to do since I work in the travel industry, to check out some of the other places - caravan parks and a 'resort/holiday park' in the surrounding beaches...Yes, my work is my hobby, but how lucky am I often wonder. We found a holiday park just up the road and decided to have a drive around. We were impressed. Another beautiful location. The cabins were actually of a higher standard than our usual spot. I got out of the car and went to inspect one of the beach cabins and get a closer view. With my 'Mother' hat on I needed to see the kitchen etc. As I walked up, the housekeeping ladies who were cleaning it, invited me in to have a look. They asked me about my kids and told me the other type of cabin would be better because of their age - they shouldn't be in bunks, but they could put the 2 king singles together and they could all sleep in that. I decided that when I got back to Sydney, I would check out the pricing of both holiday parks - the new one and our old one. When I called reservations at the new one, they asked me when I was booking, did I have children, and how many. They then quoted the 'family price' - I can live with this. It was a price for families that included anything from 1-4 kids. But the price is the price is the price. And it was different for couples, slightly cheaper, but at least I knew upfront and clearly what my price was going to be. It was a nightly rate inclusive of body count, big and small bodies in a total beachfront ocean villa. The price was also actually cheaper than our usual spot and provided a kids club,- kids activities and bedding, linen and towels... ahhh, I thought, why can these guys supply linen and towels and the others can't with the same constraints? And it hurts you more than them, if they switch So, after 20 years, we are going to try someplace new. Our needs have changed, and for a slightly cheaper price, I get many more inclusions and it is straightforward. I recognise our needs have changed, but I kind of wish our old place would have been, I don't know, a little nicer to me. On reflection, I reckon that the thing that tipped me over was the attitude and the bedding and towels. Do you know how much space that amount of doonas, bedding, and towels take up in a car? And we had a Tarago. Loss of trust leads to loss of customers Both properties are clearly targeting couples as well as families - the cabins at our old holiday park can take 4 kids with 2 adults. They advised that because they are so remote, they can't cater to linen. I wondered as both accommodations are as remote as each other. Maybe they fed me a 'porky pie' ? This is what I think now, whether it is true or not? I wonder if this is what other people are thinking too. It also got me thinking about the revenue forgone over the next 15 years of holidays to our old holiday park. With our 'big holiday' and our short getaways, it might be a couple of thousand a year over 15 years. This is around $30 000. Plus I have told lots of other people about our experience. If you would like to read excerpts of the original Domesticate report, you may refer to the Tourism Research Australia website and report Changing Consumer Behaviour Impact on the Domestic Tourism Market. Here is a sample of our findings back in 2006, still with some relevance: "Initially the issue is rationalised around price. In actual fact, it is influenced by two factors. One is that the way many overseas holidays are priced accords more closely with the ways consumers understand the “real” cost of a holiday (upfront, known quantity) whereas with Australian costs are more on-going and hard to estimate." Domesticate 2006 Do you want to hear more from us? Want to be kept up to date with the latest travel and tourism insights? Join Our Mailing List. Every 2 weeks, we send the latest practical insight for you to apply to your business and destination marketing.