Tuesday, January 24, 2006

How the travel industry disguises the real price

Let’s assume the price of your product is so high that it frightens your customers off.
Maybe because of the rising costs in your industry or maybe you are just not price competitive.

So if the price is scary – don’t scare them – don’t tell them.

Instead you might disguise the price.

How do you do that?

The car retailers have been doing this for decades. Instead of telling you the price of the car – they advertise the monthly payment. “Wow - you think - all that luxury for only $400. I can afford that.” Of course the reality is that it is $400 per month for four years and at the end you own nothing. But $400 is a lot less frightening then $30,000.

The travel industry is disguising the price quite imaginatively.

First they list prices without taxes. Yet the taxes seem to add another 20 % or more to the final price. They have been doing this for quite some time so most of us automatically look at the price and add taxes. Yes – deception creates cynicism and reduces trust.

Of course this approach might impress some, fool some, and annoy others. I was mostly annoyed. You decide.

As I skimmed the vacation ads in the newspaper, the ad from Sears Travel caught my eye

Cuba from $85 /month

Of course Cuba for $85 is what registered in my mind. Closer examination revealed that the real price was $1,020 plus taxes for a package that was offered elsewhere for $578 (plus taxes of course). (Sunbeach Hotel – flight from Toronto)

Suddenly $85 did not look so good.

I’m not judging whether it is right or wrong to finance your winter vacation. That is up to you. But I think that it would be nice and more than fair to know the real price – without bringing out the calculator and net present value formulas.

Then I noticed a different approach from Sunwing vacations.

$526 off per couple

And in smaller print - $264 per person

I could not find what the real price was. Maybe it was there but I got tired of searching.

But hey, Mexico for $526 certainly caught my eye.

At least TripCentral.ca had an honest approach.

Their ad headline was

Sunshine in six easy payments

Then they listed the packages along with real prices – or at least real prices before taxes. Sigh.

So how much is it really going to cost for a winter vacation?

And yes – there is a point where clever marketing crosses the line to pure deception.

(Sources for these examples - Hamilton Spectator and Toronto Star - Saturday Jan 21, 2006)

George Torok

PS: I have recently learned that “All Inclusive” doesn’t mean “All Inclusive.” Apparently there are different interpretations of that term. Some might surprise you.

PPS: Hope you enjoy your winter vacation.

PPPS: Hope you understand the real price before you book it.

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