Consumers lost on budget expectations

Consumers lost on budget expectations
By admin


Tourism Portfolio managing director Donna Kessler has stressed that a shift in budget expectations is needed for the Australian business events sector to return to pre-GFC trading.

Speaking to The Nibbler yesterday as Tourism Portfolio celebrated its 10th anniversary, Kessler highlighted a number of changes to business tourism over the past decade, led mostly by the global financial crisis.

For instance, long haul travel has lost favour to domestic travel, and there are now fewer events and smaller budgets. But as the industry makes a solid recovery almost five years on from the GFC, Kessler said consumers have developed unrealistic budget expectations.

While operators routinely slashed prices when they were desperate for business several years ago, she said consumers are now used to receiving drastically reduced rates.

And while budgets and the quality of product has increased over time, she said it’s common for consumers to push for the same heavily reduced rates.

“In the midst of the GFC, it was expected that consumers would drive venues down on price, but the landscape has  changed, and yet consumers expect to receive more for less,” she said. “We need to bring their expectations in line with the reality of what products actually cost.”

Kessler said the imbalance is becoming more pronounced as increasing competition puts stress on operators to lower prices. But ultimately, she said dramatically reducing prices is “not sustainable”.

“If the industry continues to compete by offering unrealistic budgets, we are not doing ourselves any favours in the long term,” Kessler said. "The reality is that quality comes at a cost.”

Kessler suggested re-educating customers would help to address the issue, but insisted that the industry was well on its way to recovery.

“The industry will return to where it once was… We’re already seeing a return to long haul destinations, and confidence is definitely bouncing back,” she concluded.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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