As economic pressures mount, agents are noticing a reduction in bookings as increasingly price-conscious clients compare today’s travel costs against pre-conflict and even pre-pandemic prices.
A recent Travelinfo OpenJaw survey of more than160 travel agents found that June bookings had slowed, with 33% of respondents saying travellers were seeking cheaper deals than those currently available, while 25% said more clients were booking directly with suppliers.
Travel agent consortia told Travel News that the phenomenon was not new, however it is becoming more prevalent due to international and local economic pressures, more access to direct booking information and clients’ resistance to high travel costs and airfare pricing. Rather than competing on price alone, they say agents should focus on demonstrating the value of their expertise.
“I do not believe the bargain hunter is a new phenomenon. What has changed is the volume of information available to consumers and the ease with which they can compare pricing across multiple channels. Travellers are more informed than ever before, but they are also often overwhelmed by conflicting information,” explained Jenna De Allende, GM of Sure Giltedge International and Incentives.
“Whilst this creates challenges for travel consultants, it also creates opportunities for those consultants who are able to clearly demonstrate their expertise, service levels and value beyond simply providing a good price.”
Economic pressure and price resistance
Consortia say South Africans’ disposable incomes are under increasing strain, making travellers more reluctant to accept the higher cost of international travel.
“The income pressure is very real, specifically for outbound international travel. The rand’s ongoing volatility means that a trip to Europe today looks meaningfully different on a budget spreadsheet than it did even 12 months ago, let alone pre-pandemic. Middle-income South African families aren't being irrational when they hesitate; they're responding to a genuine shift in international travel costs and adjusting their expectations accordingly,” said Antoinette Turner, GM of Flight Centre Travel Group South Africa.
De Allende cited contributors to local financial pressure, such as higher interest rates, inflation, fuel costs and a weaker rand that are hindering travel budgets, while Aadil Esack, GM of Product and Marketing at XL Travel Head Office, also pointed to global geopolitical issues, greater operational costs and capacity constraints in certain parts of the travel market, specifically aviation.
“Consumers remember airfare and package pricing from several years ago and naturally benchmark current pricing against those historic figures. The challenge is that the travel industry has recently experienced significant cost increases,” said Esack.
Turner referred to the travel buyer behaviour as “anchoring”, explaining that consumers were still benchmarking today’s prices against a historic baseline, especially with air tickets, as they expected additional fuel and refund surcharges and high costs to eventually subside so that prices would return to where they were.
“Airfares remain one of the biggest areas of resistance and there is often an expectation that if they wait long enough, fares will come down. The reality is that whilst there are always exceptions, waiting does not necessarily result in lower pricing. In many cases, it simply results in reduced availability and higher costs,” said De Allende.
“Many consumers are facing genuine affordability challenges due to these rising living costs and economic uncertainty but still want to travel. They will now spend more time searching, comparing and waiting for perceived bargains. It’s not necessarily a lack of demand; rather, it reflects a more cautious and value-conscious traveller,” added Esack.
More info, more value
As travellers continue to resist rising prices, they are searching for travel purchases that offer them more value for money, presenting the perfect opportunity for agents to showcase their expertise.
“The mistake the industry sometimes makes is trying to compete on price alone. The stronger argument is not ‘I can match that price’, it’s ‘let me show you what that price actually gets you and what it doesn’t,” said Turner.
She explained that while some direct prices were cheaper, a knowledgeable agent could often identify a rate that included breakfast, a room upgrade or additional inclusions that were worth more than the price difference clients think they save by booking direct.
Esack highlighted the same value offered by agents’ expertise when booking flights: “Direct channels may occasionally advertise attractive lead-in pricing, but the final cost of an airfare often changes once baggage, seat selection, transfers, flexibility and other ancillary services are added. Does your client know this?”
Additionally, agents should proactively demonstrate the value they could offer through preferred supplier relationships, destination experience and expertise, itinerary optimisation, after-sales support and advocacy when disruptions occur, explained Esack.
“Flight disruptions, itinerary changes, a medical emergency mid-trip – these are the moments when the difference between having an expert in your corner and navigating a discount website alone becomes very clear, very quickly,” said Turner.
Managing expectations
The consortia confirmed that their agents had noticed a growing trend where travellers were looking for more premium experiences on increasingly constrained budgets, making it their agents’ jobs to educate their clients on the state of the market and manage their expectations.
“Part of a consultant's role today is helping clients understand the difference between what they would like to spend and what the market is realistically charging,” said De Allende.
“The starting point should always be understanding what experience the traveller is trying to achieve. Many clients become focused on a specific destination, hotel or product before understanding what it will realistically cost. By understanding what is truly important to them, consultants are often able to recommend alternatives that deliver a similar, or sometimes even better, experience within budget.”
Turner describes this as “reframing the conversation” away from what the client cannot afford and towards lesser-known options that meet all the criteria for the quality of travel experience they are looking for.
“Nobody wants to feel like they’re settling, but the truth is that some of the world’s most extraordinary travel experiences are also among its most accessible. South African travellers are often the last to know about them, because the aspirational conversation in this market is still heavily dominated by Europe and traditional long-haul destinations,” said Turner.
By having these conversations with clients, agents can ensure transparency, manage expectations and showcase their expertise and value, said the consortia.
“The most successful consultants act as solution providers rather than quote generators. When clients feel they are being guided towards smart alternatives rather than cheaper compromises, they are far more likely to see value in the advice being provided,” said Esack.
