Does buying that holiday come down to price - or value for money?

However, one thing austerity also does, is compel us to be fiscally cannier and seek out better deals. It's a way of stretching our money so that we not only meet our financial obligations, but have a bit left with which to treat ourselves. After all, why do we work so hard, if we can't at least enjoy the fruits of our labours here and there?

It's been interesting to see how the current situation applies to the travel industry. Many countries and their tourism sectors have been compelled to become more competitive, in order to at least maintain visitor levels and per-tourist spend, or to try and make up ground lost in the past two or three years. For many countries, ours included, tourism is an enormously lucrative (and sustainable) source of income, and a major employer; if visitors stay away, the economic ill-effects can be catastrophic.

Knock-on effect

Lower tourism numbers also have a substantial knock-on effect in other areas. If fewer people take holidays, fewer airline seats are filled. If fewer people are flying, hotels will struggle to maintain or improve occupancy rates. Tour guides, taxi drivers, restaurants and other service providers will have less work. In addition, people making and selling curios, clothing and other products will struggle to make ends meet. Jobs will be lost and businesses will sink, critical foreign exchange will be lost, and government tax revenues will shrink. In other words, everyone - not just those in tourism-related sectors - will suffer.

A country like Greece, for example, is facing total economic meltdown. Its government, deeply unpopular for pushing through austerity measures required by the international community, has endured vocal criticism and civil unrest. Predictably, potential visitors are spooked by the situation. This is a country that has never been one of Europe's wealthier nations, and one which relies heavily upon tourism to remain economically viable; stuck between a rock and a hard place, how does Greece sustain tourism in the face of such a national crisis - and what will happen if it cannot?

Revolutions counter-productive when it comes to tourism

Some countries have also had to contend with other factors that have impacted on tourism. Egypt's revolution earlier this year is a case in point: while its domestic upheaval was largely confined to Cairo's Tahrir Square, that country's tourism industry suffered immensely as jittery foreigners stayed home - or went on holiday elsewhere.

Rectifying such a disaster can take years. Much as a person or company's reputation is built up over a long period of time through consistent behaviour, so is a country's, and it can be destroyed in the blink of an eye. It matters little how strong a country's tourism infrastructure is, or how cheaply one can holiday there; perception is effectively truth, and if people perceive a destination to be unsafe or not as good as it used to be, they will go somewhere else.

Secondly, I must make it clear that South Africans are still taking overseas holidays. In fact, the travel and leisure industry is looking healthier overall than it did at the height of the recession in 2009. Why this is so, is moot: certainly, South Africa has so far been spared the worst effects of the financial crisis, but it's probably also because the travel industry has worked hard to come up with product bargains that suit contemporary pockets.

This brings me to a fundamental question: does the attraction of a holiday now come down to price alone, or value for money? Will people take a holiday because it's cheap, or because they get maximum bang for buck?

Trading down constantly will ultimately not benefit anyone

As a travel industry professional, my intuition tells me that it's a bit of both - but that value for money will always be more important than merely the cheapest price. In other words, to get people to take a holiday it is not enough to offer, say, a cheaper hotel room. Rather, the value-added route strikes me as the better option: give them a better hotel room at the same rate, with three meals a day included instead of just two.

The thing is, trading down constantly will ultimately not benefit anyone. For example, putting clients into a cheaper, lower-rated hotel may save them a little money, but the quality of their holiday experience will also be diluted. When people are used to a higher standard of holiday, their inevitable response will be a negative one; driving a skorokoro will never be enjoyable, when one is accustomed to sitting behind the wheel of a BMW.

This is not to say that tourism operators can blithely carry on charging top-dollar prices, and throw in a couple of extras to sweeten the deal. Potential holidaymakers, already more money-conscious than before, are not generally that naive - and, for better or worse, they tend to be very price-sensitive. While this is a commendable trait it can, however, be to their detriment when they book a holiday. Saving R100 here and there may result in a cheaper holiday, but it's not going to make for a more memorable one.

Offer the best deal you can

Therefore, to pique the public's interest in the first place, the challenge is to offer them the most competitive pricing possible. That represents a good deal. To get them to buy the holiday, the next challenge is to provide them with those add-ons that make the package absolutely irresistible: the upgraded room, the kids staying free, the day-trip thrown in, the extra hotel night. That's a great deal - and it will convince them that purchasing that holiday was simply the best way to have spent their money.

However, to achieve this, requires the co-operation of the entire travel and leisure value chain. Every step of the way, from the travel agent to the airline, to the tour operator and the hotel, the best deals have to be wrought - and that includes price and value for money. Moreover, I think this is understood: we are currently seeing the most attractive offerings in years come to the fore, as the industry strives to sustain itself.

There really never was a better time to go on that dream holiday, particularly to destinations like Greece or Egypt...

Whether price or value for money, it is abundantly clear that the name of the travel game is to get people to take holidays. If that means making a smaller profit in the end, then so be it; it's infinitely preferable to no profit at all.