WHY DO EARLY BIRDS MISS PRICE CUTS?
Have a question? Ask our expert Simon Calder
Q In January I booked a sailing holiday in Croatia from Dubrovnik to Split in August, paying just under £1,000 for both myself and my daughter. I thought it was expensive but was happy as the trip ticked a number of boxes.
The website lets you look at places available on the trip you have booked and price. It was obvious that the boat wasn’t filling, and the tour operator dropped the price to £700 per person.
I have written to them and the responses have always been professional. They are sympathetic and
understand how I feel but can’t do anything. My view is that they could in future offer some type of early booking discount at least for next year. They say that the way they price and offer holidays is normal for this type of holiday.
Is this practice normal across the industry? The learning point for me is that I should take the risk that a holiday may sell out, and wait for the price to drop.
Simon B
A Travel firms, whether they are selling adventure tours, cruises or plane tickets, face a tricky challenge. A car dealer who makes no sales all day will have the vehicles to sell tomorrow. But once a trip begins, any unsold places represent potential income that is lost to the travel firm forever.
So they have a clear idea of how they want the “sales profile” to look. Ideally they will sell some stock a long way ahead at the lowest price, and gradually increase prices until the last places are sold shortly before departure at the highest rates.
They aim to reward early bookers who commit well in advance with the lowest prices, and if places are selling faster than expected, a rational firm will push up prices steeply. But sometimes sales are stubbornly slow. The best way to stimulate bookings is to cut the price. That is why flexible people who are prepared to buy close to departure are often rewarded with a cheaper deal.
On many occasions I have bought flights or holidays well in advance and ended up paying more than people who grabbed a late-notice bargain. I console myself with the knowledge that anticipation is an important component of a journey, and that I have derived benefit from months of looking forward to the trip. I trust you can, too.