Four years after the tremors of the international credit crunch were first felt here in the Middle East, consumers continue to tighten their belts and keep a rein on their spending. And having seen the formula win results in 2011, value continues to be a dominant theme for 2012.
“For 2012 and 2013, value is still in vogue,” industry opinion leader Peter Yesawich, vice chairman of MMGY Global, an agency that works with hospitality clients on business strategies, told businessmen at a summit in the US recently.
There’s no escaping the trend: from full-service carriers and luxury hotels to budget airlines, discounts and add-ons remain the norm.
The trend is driven by the fact that consumers across the spectrum are talking to each other (via the internet, of course!) to find better deals in an attempt to save a few dirhams while continuing to enjoying life’s luxuries.
Although the industry reports an anecdotal increase in visits to travel agents, online bookings now account for nearly half of all bookings, the ITB World Travel Monitor Report 2011-2012 shows. Worldwide, leisure travel continues to be the dominant reason to go online.
So as the online world continues to throw up exciting new business models, travellers are benefiting. The last year has seen a boom in coupon companies, and the launch of sites such as Groupon Getaways, which have brought boutique hotels in Bali and Krabi closer to travellers in the Gulf. While increased demand, limited supply, and fluctuating fuel prices will see airfares and hotel-room rates rise by as much as five per cent in 2012, according to Smith Travel Research, web sites such as Travelocity and Expedia will allow travellers to shave as much as $500 off trip costs by bundling flight, room and car rental into packages.
The last quarter of 2011 and the first quarter of 2012 saw full-service carriers such as Emirates airline and Etihad Airways launch short seat sales, while budget carriers such as flyDubai have benefited from deals to fly passengers to the same destination once again.
The recession has also caused some companies to rethink the approach to consumers, to find innovative solutions. Finding value for money – but not always the lowest price – is a key trend right now, as travellers look for breaks with an “authentic” feel or specialist experience such as river cruises or with an educational element. The Hotel Missoni in Edinburgh, which charges $200 a night, provides some basic amenities like snacks, soft drinks, mainstream movies, wireless internet and even laundry service at no charge.
In another development, tourism providers are teaming with teaming with non-travel businesses to reduce inventory.
One example is the rise of mystery trips and mystery bookings. A “blind” purchase, usually made online, fills rooms and generates consumer excitement without discounting the brand. Although mystery trips are not new, they are gaining a new popularity as some tour operators attempt to fill empty seats in a struggling economy. Another is a luxury Dubai hotel on The Palm Jumeirah, which gives away free room nights to consumers taking a loan with a prominent city bank.
The Middle East has always been a price-conscious market and the global downturn is only another reason for consumers to make value purchases.
By CLARK KELLY