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Free is new F-word

Written by editor

The new ‘f-word’ pursed on the lips of UK holidaymakers has nothing to do with pent-up anger. It is F-R-E-E.

The new ‘f-word’ pursed on the lips of UK holidaymakers has nothing to do with pent-up anger. It is F-R-E-E.

Customers are in the driving seat during these squeezed market times and looking to be given something for nothing as they weigh up their getaway options.

No word grabs the attention better than ‘free.’ Most players in the industry need to work harder and become more aware of variations in demand – and the willingness to pay.

This UK development is outlined in the WTM Global Trends Report, in association with Euromonitor International, the leading global market intelligence company. World Travel Market, the leading business event for the global travel industry, is at London ExCeL from November 10-13.

The report forecasts that clients will be naming their own price or expecting to have for gratis a major slice of the product or service.

“As economic activity is likely to slow until 2010, innovative means of
saving money will become more attractive,” said Fiona Jeffery, chairman of World Travel Market. “However, free or bargain price offers that receive positive reaction, hopefully spark clients to return and make profitable product buys.

“These new pricing models making waves include ‘pay what you want,’ auctions, and ‘core free goods.’ They often pose a threat to competitors, but also give brands the chance to engage with consumers and build loyalty.

“Profitability remains the most important underlying factor – protecting revenues in uncertain economic times.”

For instance, Jeffery said free city tours are geared to generate business for the paid ones, and there can be nearly 50 percent referral rates. The added bonus is it requires little or no investment and builds brand recognition.

Savvy consumers, doing their comparative research while watching the pennies, are still likely to be short on confidence and make a ‘hard sell.’ They welcome pricing flexibility.

Some airlines have ‘core free goods’ off-peak promotions for flexible passengers who are then charged for all ancillary services. The merit of this strategy to fill planes is not conclusive, says the report.

There is one network – with an annual £35 membership fee – of 320 hotels where accommodation is free, but guests are required to pay for breakfast and dinner. It involves relatively few restrictions on when and how long you stay.

A super saver started in the United States sees anonymous hotels inviting people to ‘name your own price’ via blind auctions. It is done with flights and car rental, too, and this idea is likely to expand, because it allows operators to move stock that would remain unsold if left to traditional booking methods.

Social networking sites such as showcases the ‘no-cost, full-service’ offer and predominately appeals to single under 30s(75 percent) and Y Generation (almost 50 percent) of below 25.

It is claimed to enroll 10,000 new members every week with almost 780,000 in October, five percent in the UK. A non-profit organization, is dependent on donations and embraces 232 countries, 47,544 cities.

It finds worldwide free accommodation with individual hosts who greet and meet each customer at the airport or rail station. They sometimes even provide free guided tours, leisure activities with their friends, and tips on experiencing local life.

The report predicts that travel networking websites and activities are expected to grow steadily over the next five years and should become a major trend for the industry.