There’s nothing that businesses and the markets fear more than uncertainty – unfortunately for them, the only certainty right now is that the UK and its beleaguered citizens are enduring more uncertainty than at any time in living memory.
The biggest cause of this volatility is undoubtedly Brexit – but that’s far from the only issue. Driven by the twin agitators of #Youthstrike4climate and #extinctionrebellion, climate change is arguably higher up the consumer agenda than it has ever been whilst job prospects and security are also in flux – whether that’s due to closures, redundancies or relocations caused by the current economy or the longer-term sources of angst like automation and outsourcing. We’ll undoubtedly see the impact of these frustrations in the future; with Brexit we’re feeling the pain right now. As such, almost a third (29%) of the great British public are not planning on holidaying in 2019, with a quarter of those citing lack of affordability and 9% explicitly blaming Brexit-uncertainty.
For the vast majority though the mantra seems to be: Forget the uncertainty, we want a holiday. Indeed, 46% have already dealt with their holiday planning (37% have already booked their summer holiday whilst 9% are in the process of booking.) This leaves a massive 24% who are planning on going somewhere this summer but have not yet taken any steps towards making a booking – in real terms, equating to 12.5 million individuals spending on average £855 per person per holiday (based on a survey conducted by Nationwide), you get some idea of the size of the prize which currently lies unclaimed – potentially as much as £10.7 billion.
So, how do tour operators unlock this treasure trove of riches?
#1: Overcome consumer lethargy and employ nudge tactics
19% of those who are yet to book say they simply, “haven’t got round to it yet”, with a further 7% saying that they’ve “been waiting to get a last minute deal”. With this group, of course the danger is that they never quite get to the point of clicking the book button. Time-limited deals, exclusive offers and even the John Lewis “never knowingly undersold” model of price match guarantee, can all help to convince a jaded or reticent traveller to become an actual customer and potential ambassador.
#2: Provide better quality and higher volume of visual inspiration to drive brand engagement
17% of those who are yet to book say they are “unsure of where to go”, with another 7% saying that “I haven’t seen anything I like yet”. Most travel websites are built around an assumption that the traveller has a vague idea of where they want to go and the booking process builds from that point, but some are starting to pay greater attention to their role as inspirational leaders. Look to leverage influencers here and recognise the importance of social media engagement, particularly platforms like Instagram that are focused on visuals to create demand around specific destinations.
#3: Be prepared to take a hit on margins or experiment with pay-later models
28% of those who are yet to book say they “can’t afford it this year”, with another 10% saying they “have been saving up”. In the rest of the retail sector, we’ve seen significant price discounting help drive sales and, of course, this is a well-known tactic in the travel industry, though arguably this year the discounts need to be better than ever. Perhaps investigate the buy now, pay later models like Klarna, which have helped some to maintain sales momentum in a difficult climate or lead with a more benefit and service angle – where value is represented in convenience rather than cost terms.
Is the current short notice get away a sign of things to come?
Another consequence of this last-minute rush to the sun will be an even greater burden placed on already-stretched airports and ferry terminals. Our recently published thought-piece on Open Travel which describes the path we are on towards a travel revolution facilitated by gradually increasing levels of comfort with sharing our personal data, suggests two possible answers to this question.
Firstly, with more and more airports and industry bodies (such as IATA, SITA and WTTC) trialling biometric systems designed to enable a seamless passenger experience, UK airports will be better able to cope with any future surges in passenger numbers like the ones resulting from the kind of choice paralysis we are currently seeing.
And secondly, and perhaps more of a future facing, the increased ability of travel providers to offer the personalisation of travel recommendations that are far more contextualised to the specific travel needs of the moment, should mean that such lethargy and the surges become a thing of the past. A truly empathetic travel algorithm should be sophisticated enough to offer the right inducements to the right people at the time, whatever the prevailing economic and/or political situation.
We may be an island nation but our thirst for travel is very much part of our collective personality. If tour operators and travel retailers can positively engage with the ‘would–be’ travel sector in a way that encourages momentum and desire to book – the relationship may prove more enduring and indeed rewarding than the usual holiday romance…
This post was written by Unlimited Group’s Nick Chiarelli with data provided by Walnut Unlimited’s Omnibus.Back