2024 has been a year of curveballs for the travel industry (and the whole world, for that matter). There’s so much uncertainty going around, costs are all over the place, and world events are chaotic, to say the least.
Of all the factors making it a strange year for travel, cost and inflation is the big one.
After the “revenge travel” rush following the pandemic, inflation and high costs are now testing travellers’ and operators’ patience alike. Consumers are counting their pennies (or shillings or yen), and travel businesses are feeling the pinch of climbing expenses.
So, how can operators keep prices right and customers happy without losing their shirt? It’s all about flexibility and embracing helpful tech.
Inflation is hurting customers and operators alike
Tourists have been more cautious this year. For many, a holiday is now more of a luxury or an expense to be slashed rather than a welcomed getaway. Runaway inflation means people are shrinking holiday budgets or taking shorter trips, making every pound count.
According to Arival’s latest data, one-third of operators are already seeing declines in customer numbers as budgets tighten.
Costs are on the rise for operators. “Inflation” is economics speak for “everything is more expensive”—from fuel and wages to keeping the lights on. Operating costs have risen sharply, with 68% of European operators raising their prices in 2023 to keep up. Doing more with less has been a theme with costs on the rise. However, in 2024, we saw some levelling off of tour prices as operators tried to keep their bookings attractive.
We’re post the “post-pandemic” mindset: The initial post-pandemic boom is settling down, and bookings in some regions are even starting to dip. Nearly half of operators in the Asia-Pacific region report flat or declining bookings this year.
Operators need to adjust if they want to keep their tours full and their bank balances happy. It’s best to focus on today as the reaction to the events of 2020 fades into fiscal history.
Smart pricing tips for today’s market
According to a recent Arival study, most operators are treading carefully with price increases this year—because let’s face it, no one wants to scare off the customers. We’re hearing from a lot of operators who just want to know what to do.
Here’s what’s working:
- Strategic price bumps: Instead of across-the-board increases, some operators charge a little extra on popular days and keep prices steady (or even offer discounts) on slower days.
It’s like paying more for Saturday brunch than a Tuesday lunch special. The survey shows that 30% of operators are now using this type of selective pricing to boost margins.
Dynamic pricing can help automate this.
- Perks and flexibility: People are more likely to pay up if they feel they’re getting more for their money.
Offering bundles, like free refreshments or a “skip the line” option, gives them value without changing the base price.
About 25% of operators have begun offering extra perks to justify their pricing.
- Using data for smarter choices: When times are tight, guessing isn’t good enough. Real-time booking data lets operators see what people are willing to pay and adjust prices, ensuring they hit the right note.
For example, operators using data-driven pricing strategies report up to 15% higher booking rates than those relying on manual adjustments.
How technology can help
Trying to keep up with price shifts manually is like catching water with a sieve. That’s where technology comes in handy.
Operators can stay ahead of the game using smart ticketing tools and keep their pricing smooth and strategic.
How Palisis helps operators keep their cool (and profits):
Dynamic pricing
Palisis’s ticketing tools allow operators to adjust prices based on demand, season, or peak periods. Think of it like an automatic “happy hour” for ticketing—customers pay more during busy times and enjoy discounts when things slow down.
Operators using dynamic pricing models like this have reported 20-30% revenue boosts during high-demand periods.
Alternatively, you could adjust ticket prices for tourist season, raising them slightly at peak times and dropping them during quieter months. It keeps crowds manageable, encourages locals to visit in the off-season, and balances out revenue.
Spotting trends
Understand your data. If a lull is approaching, you can adjust prices, set up a flash sale, or create a seasonal offer to keep bookings flowing.
Imagine you are a hop-on-hop-off bus, and you notice bookings are flat for mid-year. You may consider an early-bird discount, bundled with free hot chocolate for rainy days (who says buses can’t be cosy?). It kept those seats filled without denting their margins.
Flexible fee models
Operators can choose from different fee models, like per-ticket or revenue-share options.
It’s a pick-your-own-adventure in pricing, so they can find a setup that works best for their business in choppy market conditions.
Looking ahead: how to prepare for the next economic twist
Operators can’t predict the future, but they can be ready to adjust to it. In 2024, it’s clear that tech-savvy pricing is key. Smart ticketing systems that let businesses adapt quickly to shifting demand make all the difference. That’s a good quality to have in any economy, and it’s a way of operating that will help you make the most out of good times, manage slowdowns, and deal with any bumps in the road.
With the right tools, operators can adjust on the fly, meeting customers where they are while keeping their own business thriving. Palisis is here to help operators find that sweet spot between smart pricing and happy customers—because that’s the real ticket in today’s market.