Value is in the eye of the beholder
BUDGET-conscious
customers – which are
most travellers today –
are looking for a good deal.
And what that “good deal” is
depends not on price but the
value the customer perceives
they are getting.
Travellers around the
world are increasingly
prioritising value over cost,
says Travelport’s Global
Digital Traveller Research
2019 report, which surveyed
23 000 people from 20
countries, including 500
South African travellers.
“When booking a flight,
value-for-money is a top
priority for over four out of five
(86%) travellers today, with
just one in five (18%) now
booking solely on cost,” says
the report.
To find offers of value,
travellers nearly always use a
combination of travel review
sites, such as TripAdvisor
(42%); price comparison
sites like Kayak.com (38%);
and recommendation sites
like Kiwi.com (36%). 31% of
respondents said they have
conversations with travel
consultants.
So where do agents have
the edge?
When shopping online, 50%
of travellers have mounting
frustrations when it comes
to knowing which companies
they can trust. They are also
frustrated by not knowing
whether online reviews are
genuine (50%) and the time
required to find the right
option (43%).
In the low-cost carrier space,
suppliers are seeing demand
for value in different ways.
Mango has launched
its GoRewards loyalty
programme, which
offers customers instant
gratification. It allows
passengers to access
rewards, up to the value of
R2 000, within 24 hours of
ticket payment. “We are trying
to add value in a different
way,” says Mango acting ceo,
Marelize Labuschagne.
The airline has also seen
demand for its “fly now,
pay later” payment option,
whereby cash-strapped
customers can pay for flights
on credit using their Edgars
card, Marelize says.
FlySafair has just launched
a similar solution. The airline
has partnered with Mobicred,
an online credit facility, to
provide passengers with
the option to fly with the
airline now and pay off
their purchase in instalments
(for more on this story, see
page 8).
“LCCs rely on people having
enough disposable income
to fly and go away on trips.
There is some guaranteed
corporate travel and essential
travel, but what we really
need is the leisure travel to
fill planes. In bad economies,
people have to tighten their
belts and often the holiday
trip is one of the first things
to suffer,” says Kirby Gordon,
head of sales and distribution
at FlySafair.
However, there are some
mitigating factors that help
LCCs in tough economic
times. “Some people switch
from full-service carriers to an
LCC,” says Kirby.
The comparison between
LCCs and full-service
shouldn’t be severe in terms
of expectations, says Kirby. “A
good LCC should still offer a
great experience. You should
still leave on time, the staff
should be friendly, the aircraft
clean and pleasant. The idea
is that a good solid service is
delivered but at a reasonable
cost. It’s a consistent, greatvalue offering.”
Hospitality
In the hospitality industry,
budget travel means making
travel more accessible to
more people, says Andrew
Widegger, ceo of City Lodge
Hotel Group (CLHG).
Budget is the defined
amount of money the traveller
is willing to spend on an
experience, he adds. “It’s
up to the traveller how they
portion their spend, and up
to us as facilitators of travel
to help travellers make those
decisions.
“A tough economy demands
that travellers tighten their
belts. Being able to ‘shop’
within the CLHG portfolio
of hotel brands provides
opportunities to adjust travel
costs without compromising
on service excellence,” says
Andrew.
It’s important to underpromise and over-deliver,
says Andrew. “There is the
reassurance that consistent
brand standards across all
our brands prevail, including
free WiFi, parking, 24-hour
reception, clean rooms,
comfortable beds, breakfast,
TV, in-room tea/coffee station,
air conditioning, plus the
option of adding on extras as
and when necessary.”
According to Global
Accommodation stats,
the emerging trend is that
government departments are
starting to request quotes
with a limited budget. “There
is definitely more pressure
on government travellers to
spend less on international
hotel accommodation,”
says Caromien Louw,
resource manager at Global
Accommodation. “Corporate
travellers would rather stay
fewer nights at the same
four-star or five-star than
downgrading the quality of
hotel. This is especially true
for Africa.
“Domestically, our corporate
travellers are increasingly
booking guest houses over
hotel rooms,” she says.
For budget conscious
travellers, price certainty is
critical. “At our entry-level
four-star resorts, such as
Miranda, we contract to the
Rand, which means between
paying the deposit and final
payment, there is no repricing
of packages,” says Ramesh
Jeenarain, md of World
Leisure Holidays.
“With Sun Resorts, we
offer best rate guarantee,”
he adds. This means that if
a customer finds a cheaper
rate online, for example
with Bookings.com, and the
travel agent brings this to our
attention, we will match the
price and offer a value add,
such as a room upgrade or
resort credit or spa voucher.
Fly now, pay later
FYSAFAIR has partnered
with Mobicred, an online
credit facility, to provide
passengers with the
option to fly with the
airline now and pay
off their purchase in
instalments.
“Mobicred will open
us up to a market that
otherwise might not
have been able to
afford to fly with us,
while also allowing
consumers to make
a choice that they
would not have been
able to make before,”
says FlySafair’s
Kirby Gordon.
Passengers looking
to make use of the
new facility can either
register for a new
Mobicred account or
log in to their existing
one to gain access to
credit.
“Mobicred is
innovative and aspires
towards creating a great
customer experience.
It also offers a great
technical solution and
we believe that it is a
responsible lender,”
Kirby says.
FlySafair currently
offers a range of
payment solutions,
including Zapper, Visa
Checkout and flight
vouchers.
City Lodge continues refurbishments
CITY Lodge Hotel Group
has undertaken a series of
refurbishments and facelifts
to its properties, ranging
from one-star to four-star.
The group continues to
update its properties with
cyclical refurbishments
across all brands. “We
keep our hotels fresh and
modern and, by listening
to our guests, in line
with their evolving needs,
we have refurbished a
number of hotels in 2019
including Road Lodge
Umhlanga Ridge, Southgate,
Mbombela, Randburg, and
East London,” says City
Lodge’s Andrew Widegger.
Up next is the 92-room
Road Lodge Rivonia.
The Road Lodge brand
offers guests generous
break fasts, good rates and
central locations close to
key points such as airports,
sports stadiums and popular
destinations.
The group’s budget-friendly
brands are Town Lodge and
Road Lodge. Road Lodge
hotels offer convenient,
practical and comfortable
hospitality, while Town
Lodge hotels offer practical
conveniences, but with some
creature comforts to make
travellers feel at home.
Ask an expect
THE core dynamics that
define the low-cost carrier
are: fly one type of aircraft
and crew, maximise
utilisation of aircraft, fly a
full economy configuration,
make as much money as
you can out of ancillaries,
yield against market fares,
and use the cheapest
distribution models.
While some of these
dynamics are and will
always remain fixed,
others – such as
distribution channels – are
definitely changing.
Historically, LCCs would
not have used the GDS
due to the high costs
involved. The strategy
was to sell directly to
customers through the
airline’s own distribution
channel. What made the
model of selling LCC
fares on the GDS work
was the addition of a
surcharge fee, as marking
up content on the GDS
counters the cost of using
the GDS channel.
It’s fair to say that most
LCCs still do the bulk of
their sales through their
own channels, such as
call centres and websites,
but even Ryanair (the
famous example) has
joined the GDS.
While it is still
uncertain how Iata’s New
Distribution Channel
(NDC) will affect airline
distribution, it is likely
that the way travel agents
access and sell content
will change.
What we may see is a
simplification of travel
agency business models,
with more transparency.
Travel agents may
need to have a difficult
conversation with clients
about increasing their
service fees as they
won’t be earning as much
from their other revenue
streams.
The NDC will see a rise
in personalised product
and offers tailored to the
client. Making money off
ancillaries is an important
part of the LCC model. In
South Africa we are far
more conservative on
this front as consumers
baulk at paying for “addons”, but with a change
in how airlines distribute
content and fares, this,
too, could change.
Agent tip
If you have a client who enjoys a cocktail or three, rather book the
all-inclusive package option for stays at World Leisure Holidays’
resorts. “We’ve done the math and two or three cocktails adds up
to the drink supplement value,” says WLH’s Ramesh Jeenarain.
Newsflash
Sugar Beach and Long Beach have pushed out the start of
high season rates. Peak period rates only apply after Christmas
(December 26)
KZN on a budget
“OUR domestic marketing
campaigns aim to debunk
the myth that travel is
expensive,” says Thulisile
Galelekile, KZN Tourism gm
of marketing. “Travel doesn’t
have to break the bank. Many
activities in KZN are free. Our
beaches are clean and the
ocean is warm, and visitors
don’t have to pay a cent for
it. There are many hiking
trails in the Drakensberg
and you don’t have to pay to
enjoy the experience.”
Thulisile adds that KZN
Tourism is actively working
with suppliers on offering
local travellers good deals.
Package details can be found
on the KZN Tourism website.
Here are a few budgetfriendly activities to suggest
to travellers:
A visit to the Nelson
Mandela Capture Site,
Howick. Many travellers
visit the site to see and
photograph artist Marco
Cianfanelli’s sculpture,
made up of 50 steel
columns between 6 and
9,5m high, which form an
image of Nelson Mandela
from a particular vantage
point.
Explore the Midlands
Meander. There is a variety
of places to visit, including
Karkloof Falls, Beacon Hill,
and a selection of nature
reserves. There are also
many different studios and
workshops, which offer
good deals on locally made
goods.
The Durban Botanical
Gardens are the oldest
surviving botanical gardens
in South Africa. Some of
the trees are over 100
years old and it’s the
perfect place to take a
stroll or enjoy a picnic.
Lake St Lucia is one
of the 10 jewels of the
iSimangaliso Wetland Park
and UNESCO World Heritage
Site. It is also Africa’s
largest estuarine system (a
partially enclosed coastal
body) and is 80km long
and 23km wide. The lake is
home to over 800 hippos,
1 200 crocodiles, pelicans,
and flamingos. While
there are paid activities
such as boat cruises and
scuba diving, travellers can
explore the nature trails or
simply relax on the beach
free.
If you are near City Hall in
Pietermaritzburg around
midday, hang around for the
boom of the One o’clock
Gun. The gun is a 5,5kg
naval cannon that arrived
in Pietermaritzburg in 1901
and used to signal the
arrival of post from Durban
every day at 13h00. The
cannon stands outside
the City Hall, which is a
Victorian building said to be
the biggest brick building in
the southern hemisphere.
The building also has
a huge pipe organ and
stained glass.
Travellers can “walk among
the clouds” at the Dlinza
Forest Aerial Boardwalk
in Eshowe and see nature
from a bird’s eye view.
The walkway is 10m high
through the forest canopy,
where 65 bird species
reside. There is also a
20-metre high viewing
platform.
Book it!
Princess Cruises is offering a seven-night cruise on
the brand-new Sky Princess ship, which sails around
the Mediterranean from October 1. Rates are from
R24 999, including airfare. The cruise will depart
Athens and visit Kotor, Corfu, Sicily, Naples and
Barcelona. All meals are included onboard. The trip
also includes transfers from airport-to-pier-to-airport.
Book it!
Premier Hotels is offering a “pensioners” getaway for stays at any
Premier or Faircity hotels for travellers over 60 years old. Benefits
include 50% off the best available rate, a complimentary upgrade,
turn down, WiFi, parking, and a complimentary late check-in.
