Discounting will work

Discounting holidays to countries affected by the Indian Ocean tsunami will bring tourists back, say operators.

This was the message from industry representatives gathered at yesterday’s “Tourism after the Tsunami” FastConference hosted by TravelMole.

Opening the event Starwood Hotels and Resorts general manager in London, Colin Bennett said although the group’s hotels in Thailand and Indonesia had not been damaged, they were suffering a big drop in demand. “They are desperate to get people back so are doing big discounts,” he said.

“There is a sector of the market that will respond to discounts, but you have to be careful about selling places just on price. You want to send the right message,” said Explore co-founder Derek Moore, who was on the panel. He added that operators negotiating local hoteliers into discounts in the aftermath of the tsunami was akin to “kicking a man while he’s down”.

Another panel member was PATA UK chairman, Tim Robinson. Commenting on the effect of discounting he said: “If you go out on a basis of a discount price that has been extorted out of hoteliers then that is a bad thing, but on the other hand there is a value to people coming back home and telling good stories about their experience.”

Geoffrey Lipman, special advisor to the World Tourism Organisation said the industry would inevitably enter a period of discounting holidays to the tsunami-hit region.

Speaking from the audience Dave Hamlet from Passion for Travel said: “To get people going back there and restore confidence in the destinations, I’m afraid the only way you are going to achieve that is by price discounting.”

Quest Travel managing director, Dave Simmons said his company was not discounting at the moment, but said he would in weeks to come. “We need industry and tourist board led activity which is supported by price discounting to get people back.”

He added: “It’s perfectly possible to discount now and get prices back up in a year or so. The reality is that consumers have a short memory – you already have to dig deep to find stories about the tsunami in the papers.”

Mr Hamlet added that discounting had worked in other countries such as Egypt, which has suffered drops in demand after incidents of terrorism.

Chris Kirker of The Grand Touring Club was also in the audience. He said that operators must renegotiate contracts after events such as the tsunami because otherwise people go elsewhere.

From the audience, ABTA spokeswoman Frances Tuke warned that tour operators must give people the same standard of holiday, regardless of the discount. She said ABTA supported action by the FTO to send representatives to affected areas and assess hotels and infrastructure to ensure holidaymakers would not return home with negative messages about their experience.

Toucan Travel’s Terry Thornhill said his agency was cautious of discounting for fear of getting the “wrong sort of people” visiting the affected regions. “I mean the sort of people who might normally go to Benidorm but go because of a discount. We get complaints from these people because they don’t get what they are expecting.”

Lonely Planet Travel Guides travel information manager Tom Hall asked if it was sustainable to get people back to the tsunami-affected countries with discounts. His question was answered by Mr Lipman, who said it was socially and economically-sustainable to restore the tourism industry.

Mr Robinson agreed but added that the difficulty for organisations like PATA, which help people on the ground, was finding the right balance between getting the industry back on its feet as quickly as possible and making sure it is done in an environmentally sound way.

Sue Hurdle from the Travel Foundation agreed with Mr Robinson and said the key was putting the decision about how to invest donations received by the tsunami-hit countries into the hands of local people. Her organisation is focussing on a project in Sri Lanka, directing funds donated by tour operators and their customers to rebuild infrastructure and get local businesses back on their feet in a sustainable manner.