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The Impact of Caribbean Deals

  • Nov 24, 2008
  • By: Joe Pike
  • TravelAgentCentral

Is it smart to cut rates during an economic crisis?

To deal or not to deal?  As the U.S. economy continues to struggle, and concern that people will not travel during the holiday season continues to hover over the industry, we pose the questions: Is it smart to cut rates or is it a panic move? Will cutting rates at hotels decrease chances of repeat business when prices return to normal? Are add-on values the smarter way to go? Or are clients smart enough to realize the real worth of the discounted values they are getting during the Christmas holiday, which have lately been perhaps the best deals offered since the aftermath of 9/11?

Last-minute bookings, however, are exactly what Maurice Bonham-Carter, CEO and president of tour operator Island Destinations, is seeing.

“It is the uncertainty that is affecting travel. People are worried that perhaps they might not have a job by the time they travel,” he says.

And this is why Bonham-Carter is urging hotels to be a bit more lenient with cancellation and deposit policies. Bonham-Carter also thinks added value as opposed to discounted rooms is the way to go. Devaluing the property may lead to less business in the future. And Travel Agent agrees. After all, do you think your clients will want to stay at a hotel that is $1,000 a night, but was less than half that a few months earlier? New clients may or may not be turned off to the hotel, but repeat customers could be scarce. The customer who stayed for $300 a night probably won’t come back for $1,000 a night, Bonham-Carter argues. Added value, however, such as flight credit, maintains the worth of the hotel while creating an incentive that will alleviate some pressure during these tough economic times.  

Island Destinations:  http://www.islanddestinations.com