How price-sensitivity became crucial in today’s travel industry
In those halcyon, pre-Covid-19 days, a bedrock of assumptions generally provided firm footing to airlines and other travel providers for day-to-day and year-on-year planning.
Some paradigms, it’s true, were already creaky. But Covid-19’s seismic impact was to accelerate change and expose ‘hard-and-fast’ rules as no longer workable.
One assumption was leisure travel is price-sensitive and business travel schedule-sensitive. Since the pandemic, shifts in demand and travel preferences upended this.
Most travellers now are increasingly price sensitive – but still expect convenience and the best deals. Perhaps a wise new paradigm might be – what they want they should get. Put another way, currently the customer is king for various reasons.
Alternative choices are highly visible to travellers, through a plethora of providers and online platforms. This is not always reciprocal. Individual travellers’ multi-faceted characteristics and needs can be fairly opaque to suppliers, partly because legacy systems and old paradigms were not made to serve new realities.
Why did price sensitivity become all-important?
There are simply more low-cost choices for travellers. As a result, many actively seek cost-effective alternatives – and not always just the cheapest but the best all-round.
The Internet also brought price transparency. Customers can compare prices across different platforms. Social media has enabled more informal comparisons and reviews.
Increased competition among travel providers, partly because of de-regulation – many travellers are more than willing to switch providers for a better deal. Providers must offer even more bang for a customer’s buck.
There is plenty travel technology can do today to even out the disparity between customer and supplier and competitor. However, it requires jettisoning old models and outdated technology.
Journey Mentor’s disruptive travel technology deepens personalisation based on travellers’ weighted preferences that include cheapest price and other factors that determine the real ‘best’ for each individual.
It continues to search better deals even after the customer has booked and paid. For travel providers, agents and airlines, it offers visibility over the competition for timely decisions and dynamic pricing.
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