When reviewing pricing, businesses should consider various macro-economic factors and the overall impact on the entire tourism value chain. Inadequate pricing can lead to unsustainable revenue growth and further disrupt the sector by placing pressure on other businesses to adopt similar pricing strategies.
Charnel Kara, tourism specialist at FNB Business unpacks key factors that businesses should consider when reviewing pricing:
On the other hand, it is also important that pricing is kept in line with competitors. However, should there be an increase, the business should be able to justify the higher price.
“Lastly, in tourism the relationship between price and quality is as important as price and service. Customers understand there will be a difference in premium when choosing a specific product or service. For example, customers know the rate charged at a selected service hotel would be less than that charged at a full-service hotel. Irrespective of price, while some customers are willing to pay a higher rate for a premium product, all customers are non-negotiable when it comes to the service they receive,” says Kara.