To partially offset the value of Sterling when compared to other currencies, particularly to the US Dollar, several British tour operators are becoming increasingly more creative to help cushion the holiday cost differential to their clients. Giant Thomas Cook for instance recently introduced an interest-free plan where their customers can spread the overall package price over a year when paying by debit card, rather than risk losing market share.
The consumer online and telephone comparison and switching service, uSwitch recently reported, in their words, that ‘the drop in the value of the Pound since the Brexit vote has led to many Brits blowing their 2016 summer holiday budget, with nearly three-fifths sinking into debt’.
Adding ‘families overspent by an average of GB Pounds 491.78, this summer, with nearly half (45 per cent) who blew the budget blaming the poor exchange rate for their extra spend’ and ‘one in three put the extra cost on a credit card, while one in ten put it on their overdraft’. uSwitch also concluded that ‘those who didn’t blow their budget said they curbed spending while on holiday, putting a dampener on their getaway, with nearly a fifth (19 per cent) dining out less and another one in five buying fewer gifts for friends and families’.
And perhaps the most alarming indicator for us ‘if the Pound stays low, fewer holidaymakers will book next year as nearly half (40 per cent) say they will delay going on holiday again until it becomes cheaper to buy foreign currency’.
It’s a catch 22 situation for many. Tour operators systematically watch critical minimum booking numbers to justify the inclusion of any product in their offerings. Last minute bookings are often the least valuable in terms of overall profitability but the industry has of course, encouraged it over decades. As a former tour operator, we avoided this scenario like the plague, instead applying any cost saving to those willing and able to pay up front, well ahead of travel dates.
There will always be a sector of our market, irrespective of where they live, who will be almost immune to increased prices, but in the case of Barbados they are in the minority. So my thoughts are, that especially in the case of the Brits, we need to demonstrate that better value for money can be offered. Of course, it is not always about discounting, but more about the consumer feeling that his or her purchase, whether it is accommodation, car rental, dining out, activities and attractions has been money well spent.
Frankly I have been surprised that, as a destination, we have seemingly not taken greater advantage of the Sterling exchange rate by sourcing more essential imported items from the United Kingdom where there are considerable savings to be made.
From a personal perspective it has never been easier to identify and compare bottom line prices on the Internet. Shipping costs to the Caribbean (including Barbados) from the UK are still relatively low and I certainly have not seen many of our local suppliers and distributors capitalise on this and the current exchange rate.