The third part in this mini-series of entries on the tourism industry takes its lead from a recent article in Travel Weekly. This kind of industry overview from leading US-based travel editors gives an insight into developments in, and the likely impact of, changing consumer attitudes and travel patterns. Among the topics discussed are the cruise sector, the role of the travel agent, ancillary fees in the travel industry, pet hates about travel, social networking and customer service in the airline industry. Many of these themes resonate with recent events.
What many consumers hate about travel seems to be what these editors call the habit among firms to ‘nickel and dime’ their customers. By way of translation, this means the tendency to promote one price to customers, before charging a different, higher bottom-line price. A good example of this emerged today with news that Ryanair plans to charge £2 or 2 Euros on all bookings from April 4th to cover the airline for costs incurred in meeting EU compensation law.
EU Regulation 261/2004 sets common rules on compensation and help for passengers who are either denied boarding, have their flights cancelled, or suffer long delays in flights. Ryanair argues that it suffered 100m Euro costs because of cancellations due to the Icelandic volcanic ash cloud and last winter’s snow closures and air traffic control strikes in Belgium, France, Germany and Spain. The £2 levy will offset these extra costs. The airline argues that these additional costs are unfair on airlines and that others will follow its lead. But Ryanair seems to enjoy the publicity it gains from controversial behaviour. So it might well end up acting alone.
It certainly appears to be the case that travel consumers baulk at being made to pay for every conceivable ‘extra’, even though many of these could be seen as central to the travel experience. For air passengers these ‘extras’ include carry-on bags, hold luggage in excess of a single item, insurance, and in one notorious case, using the on-board toilets. Judging by comments in the Travel Weekly article, one of the most-hated charges is the fee to use hotel WiFi services. Interestingly, it seems that US hotels are especially slow to waive this charge. Also, the more expensive the hotel the more likely it is to impose a fee, according to these observers.
The UK travel market will be watched closely this year, as the effect of the Coalition Government’s austerity measures take their toll on consumer confidence. I have commented on the likely impact on the tourism industry of these policies during this three-part run of posts. Holidaymakers are expected to opt for more low-cost options for their summer breaks this year. But what effect is widespread disaffection with airline extras likely to have? Industry observers think consumers may well choose to use different transport modes, driven by factors such as cost, convenience and hassle.
Rather than travelling to an airport to endure delays caused by strikes, security checks and airline scheduling, perhaps more people will prefer to use coach travel or cruise-drive options. Increased marketing effort by key players in these sectors certainly suggests that industry players are betting they will.