Consumer habits unchanged by dynamic packaging

Dynamic packaging has not altered the type or length of holiday people take, with seven and 14 night deals remaining the core business.

Holidayandmore.com general manager Vic Darvey admitted previous beliefs that the growth of dynamic packaging would lead to a radical change in habits and patterns have proved wrong.

Speaking at TravelMole’s sell-out first travel industry question time, Darvey said: “We have seen a shift to late bookings and customers are looking for component flexibility and not always looking for the cheapest price. They are prepared to pay an extra £40 for convenience.

“But when we launched dynamic packaging we thought it would change holiday patterns. It’s not changed at all. People still want seven, 10 and 14 night packages during the summer.”

What has changed however is the demand for city breaks, he said.

“People have more disposable income are taking maybe four flights a year, two or three of which are to city destinations.”

Cosmos sales director Andy Washington agreed that the vast majority of people are still going on traditional breaks.

“Around 93% of bookings through somewheretostay (Cosmos’s accommodation only site) are for seven and 14 nights,” he said.

In a frank exchange of views, lowcostbeds.com managing director Paul Evans said customers could undercut the traditional package virtually year-round by booking early with low cost carriers and late with dynamic packaging specialists.

“If you book high season now you are crazy,” said Evans. “Traditional operators are being squeezed both ways. The charters are sold at a loss in May and packages are cheap but if you book early enough with a low cost carrier they can be undercut. And in high season, when prices are high as they look to recoup what they lost in the shoulder period, dynamic packaging operators are cheaper.”

TUI UK retail and commercial director Derek Jones admitted a dynamically packaged offer could sometimes be cheaper.

“But let’s explode one myth. People don’t always buy solely on price,” he said. “We add value through the chain and the penalty for that is that you have a higher cost base. The challenge is to exist in both markets. This is not about one or the other.”

Both markets can operate in tandem, he said.

Jones said that while the traditional package was no longer growing – despite an overall increase in travel – it was not decreasing either.

Earlier Jones said there needs to be transparency from agents with the customer made clear how their holiday is being packaged.

“The issue could be when an agent brings together a seat and bed and adds a mark up without the customer knowing. As long as the customer understands what is happening, it’s fine,” he said.

The dynamic packaging debate was the first in what will be an on-going series of travel industry question times staged by TravelMole.

The next event is on September 20 where a panel of experts will discuss the next chapters in travel and tourism.

For further details go to: http://www.travelmole.com/
travel_industry_question_time/index.php