Are you planning on upping your prices in 2017? You might not have much choice, what with Brexit having played havoc with the value of sterling.
Coupled with the rising cost of oil and ongoing geopolitical events affecting global tourism, travel companies haven't had an easy time of it in 2016.
Perhaps it's little surprise, then, that four out of five UK travel firms are expecting price increases this new year, according to a new study by global travel deals publisher Travelzoo.
The firm's UK managing director Joel Brandon-Bravo suggests that travel companies have so far been absorbing some price increases on costs such as hotel rates set in euros in order to protect consumers.
However, Brandon-Bravo rightly says that this isn't sustainable, and he expects pricing for this year's holidays to increase by at least 10%. For almost one fifth (17%) of the travel firms Travelzoo spoke to, the increase could be as high as 15-20%.
Travel industry's 'two masters'
In Britain, the travel industry serves "two masters", Brandon-Bravo explained. "Firstly, the UK economy – which is currently feeling the effects of Brexit, with a pound worth much less than this time last year; and secondly, the wider global market – one that's reeling from rising oil prices, travel bans to north African sun destinations, and safety concerns in other traditional holiday destinations," he said.
One can usually cover the other if it's the case that one is struggling. Currently, however, both are flailing and "something has to give", Brandon-Bravo added.
Whether to increase prices is something of a Catch 22 for travel firms, though. Travellers already have reason enough to stay at home without a 10% price increase on their trip putting them off even further.
Travelzoo's 2016 Travel Trends research revealed how a quarter of consumers are avoiding European holiday destinations, citing concerns over the falling value of the pound and general safety concerns.
As a result of UK tourists looking for better value for money in 2017, destinations such as South Africa, Montenegro, Oman and Sri Lanka are likely to see a rise in visitors from these shores.
Brandon-Bravo says it might be a good idea for firms to start pushing these destinations, suggesting that "perhaps 2017 is the year to break out of predictable holiday destinations and try somewhere new" – especially if destinations such as Sharm el-Sheikh and Tunisia remain closed to the UK, which will "continue to put pressure on pricing to ultra-popular western Mediterranean destinations".
So what's the solution?
If you are indeed planning to increase your prices as of this month, you better ensure your customers' experience of your brand is fitting of the money you're asking them to hand over. If your website is not optimised for mobile, for example, they might not follow through on their purchase. For travel technology and digital solutions that can help position your business as an industry leader...
Contact Digital Trip today