How currency mis-perceptions provide an opportunity for holiday companies.

Brexit – Is that all anyone comments on these days – Well don’t leave just yet this blog isn’t about Brexit per se but given that it is a subject that has dominated newspapers, feeds and the TV for over 12 months it is interesting to see how that commentary has filtered down into spending patterns, especially in relation to travel.

As noted everyone in the UK has been exposed to, read and heard (you could say been inundated with) articles on how Brexit will impact everything from Fishing to Space Exploration.  Within the travel business, a major talking point has been the immediate impact Brexit had on exchange rates and how this is / will shift where UK holidaymakers choose to spend their hard earned ££s.

Since the Brexit vote Sterling has fallen 13% against the US Dollar and is often cited as a barrier to travel to the US, see the Travel Weekly article from a couple of days ago in reference to this point.

Of course, it is Economics 101 that as prices rise then demand falls and the fact that the latest ONS stats record that visitor numbers to the US are down 2% over the first four months of the year shows that impact.  However, a look at the Dubai Tourism site shows UK visitor numbers to the Emirates are up 4%, which is interesting when you consider the UAE Dirham is actually pegged to the US Dollar and therefore the price changes caused by the fall in Sterling are exactly the same for both currencies, in theory, people should be avoiding Dubai.

This disparity of performance does, of course, reflect the fact that exchange rate driven price changes are not the only factors in deciding on the destination.  New attraction parks in Dubai and the US “travel ban” are also factors.

Currency and Customer Experience

However with a Customer / Digital Experience lens it is also interesting to consider if the fact that the press conversation on the fall in value against the dollar magnifies or impacts more than the fall in value itself – or to put it another way could we be in a situation where a family planning a holiday decide against the US because of what they have read and decide to go to Dubai instead, because no one is telling them that destination is expensive.

In some ways this makes sense – you could suppose that most people do not track the price of a holiday in each destination, only what it costs relative to where they went last year.

When asked where our holidaymakers got their information about the cost of different destinations 25% stated this was from articles in the press and 35% from friends and family (of whom we can presume approximately a quarter are influenced by those same articles).   This is much smaller than 72% who rely on the Tour Operators and Travel sites but we can see preferences are being swayed by the “background noise” over and above the hard, economic numbers.

It’s even more interesting that the home pages of most of the holiday operators don’t provide a “how far does your money go” button. If people are being true to their word, then it’s face to face Word of Mouth conversations with tour operators incidentally that are driving this 72% figure but it seems there is a role for education in this area with cx.

In an age where transparency and authenticity are key, is there a role for operators to be more overt about how the pound will impact holiday choices on websites? Here at Maru/edr, we can help you answer those Customer Experience and business strategy questions.  Do contact me for further details.

 

Gary Howes is Business Development Manager at Maru/edr specialising in travel and hospitality. Contact Gary directly on gary.howes@maruedr.com to continue the discussion or connect with him on LinkedIn.

 

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