A panel at the Adventure Travel Networking conference said that despite customers paying more this year, continual cost increases will make it difficult to deliver the same standard of product without surcharging.
“Customers have psychological price thresholds. They might be getting three-star, but paying what they associate with four-star,” said Sam Seward, managing director of Exodus parent Travelopia.
“A lot of businesses here will have 60% repeat customers. Coming back after the pandemic, their expectations are lodged in the past. We’re doing our best to over-communicate and manage expectations, but there are limitations to what you can deliver off the same cost.”
Travel lawyer Becky Cackett of MB Law said she expected price increases to stabilise this year, but agreed that customer satisfaction will still have been impacted.
“We’re likely to have seen an increase in complaints as a sector, as expectations were high,” she warned.
Operator panellists agreed that surcharging would be avoided unless absolutely necessary, despite it being allowed by their terms and conditions.
But Macs Adventures product director Fiona Marshall said this approach had forced the operator to axe certain products altogether.
“An operator we were running bike-and-boat tours with wanted to increase prices again and was being rather wild west about it, threatening to start asking our customers to pay a fuel surcharge when they arrived. We decided to drop the whole product range as the price of fuel was so unpredictable,” she reported.
Certain accommodation providers were also leaving the market because of rising costs, she added.
“We feature thousands of smaller hotels and guesthouses; some of them have seen fuel bills rise from £500 a month to £3,000 a month, and they can’t continue to operate so our supply chain is narrowing,” she reported.
The small properties that are still in business are making contracting more difficult, said Seward.
“Small, owner-managed properties don’t have the cash reserves and aren’t keen to make commitments beyond 12 months,” he explained.
Seward revealed that Exodus is currently holding back certain products for 2024 as a result. “There is certain stuff, certain destinations where you simply can’t take a punt, so we won’t put it on sale yet for 2024,” he explained.
Adventure Travel Networking 2023 took place on 22 and 23 February, with TTG Media the trade media partner for the third year running.
