Travel agents are reporting muted early demand from South African travellers for the new Club Med resort in KwaZulu-Natal, with several pointing to pricing as a potential barrier for the domestic market.
A recent Travel News poll found that more than 75% of respondents had not seen interest from South African travellers, and in a poll on Travelinfo’s Facebook group OpenJaw, nearly 85% said the resort’s pricing was not competitive for the local market.
“Most of our clients are price conscious and the price is often higher than their budget,” said Pritha Mansingh, Manager of AYS Travels.
Zainab Mohammed from Dream Travel ZA said she had found the cost difficult to justify for a short stay. “We generally stay in five-star luxury properties and are usually willing to pay a premium, but this was simply too much.”
Joey Kganyago, Travel Manager at IDC, believes part of the challenge is that the all-inclusive model is less familiar to many domestic travellers.
“The Club Med model requires guests to pay a premium upfront for a fully inclusive experience, making the value proposition harder to compare against more traditional holiday options,” he said.
Price comparisons
Several agents said consumers were likely to compare the overall cost with both domestic and international alternatives, even where the products differed significantly.
“When I saw the opening specials at around R11 000 per person sharing for a weekend, my immediate thought was that, with a couple of thousands, I could book a seven-night holiday in Bali or Thailand. The comparison may not be entirely like-for-like, but it is how many consumers think,” said Kganyago.
Mohammed similarly said the pricing could prompt travellers to consider overseas alternatives. “For comparison, visiting Mauritius on an all-inclusive basis – including flights, accommodation and transfers – can be cheaper than staying at this Club Med.”
An agent who wished to remain anonymous said she booked a family of five for four nights in South Africa and a family of five for seven nights in Mexico and the land rates were similar per night.
However, she said that Club Med offered better value when the full package was taken into account. “It is all-inclusive, there's a surf school, there are day trip add-ons and you can do a day safari. If you’ve got a family of five and money is tight, you might as well get an international brand and not pay for international flights,” said the agent.
International standards
Agents say the pricing aligns with Club Med’s international standards rather than domestic standards.
“South Africa is not going to be cheaper because it’s in South Africa. Club Med's pricing is aligned with its international positioning,” said the anonymous agent.
Mohammed said the marketing and pricing were mainly tailored to the international market. “While they have maintained standard Club Med pricing and standards, South Africans look for competitive pricing and expect five-star luxury at a more affordable rate.”
The challenge is that there are few direct comparisons in the South African market, according to Kganyago. “The closest comparison would probably be Sun City, which offers more flexibility through self-catering units, bed-and-breakfast options, corporate/negotiated rates and a broader range of price points.”
Awareness
Limited awareness may also be contributing to weak domestic demand.
“For domestic demand to increase, there needs to be more marketing to make people aware of the facilities that justify the price. Most of us are not aware of how they compare with other resorts,” said Mansingh.
The anonymous agent said agents also needed to learn more about the product. “I’ve had agents reach out to me asking what I know about Club Med South Africa. Club Med and the reps can only do so much and agents will need to do their research to learn about the product.”
Kganyago believes that the resort will rather become a novelty experience for South Africans. “Club Med may become a destination that many South Africans aspire to visit once rather than repeatedly. Those who can afford it may visit for the novelty and experience but over time may opt for other international beach destinations when choosing annual holidays.”
