Are people really that price sensitive in their holidays these days?
Tuesday, July 28th, 2009If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
You’d think in these fairly dire economic days that people would be keeping close track of their holiday spending but in reality that’s not always what they do.
Just to give you an idea of how insensitive people generally are to holiday pricing, consider that a couple of years ago we accidently entered our prices in euros on one system when they were being processed in pounds on that system. The effect of that was to raise our prices by around 40% for about a month before we realised our mistake. You might think that doing so would have drastically reduced the bookings but in fact they were at pretty much the same level as they’d been the year before and the only real effect was that we made more money.
Even now, when we sometimes experiment with large drops in price over periods when we’ve not too many bookings. The overall effect is barely noticeable.
So overall people aren’t really that sensitive to price changes, even now. However, what low upfront pricing does is to bring us to the top of the searches in our area so those low prices get people to look at us but they generally book a more expensive room.
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