HOTEL DISCOUNTS Travelers Inexact Sense of Value

Posted: 28 Apr 2010 | 6:00 am

During the recent financial downturn there has continued to be considerable debate, as was the case in the 1997 Asian contagion amongst hoteliers on who was able to capture the greater market share when prices dropped. Did brands outperform independents, or could the later who could offer the lowest prices prosper more.

I've been reading the book 'Priceless: The Myth of Value" by William Poundstone who probes deeper into the psyche of consumers. One of the points made is that often buyers shy away from the most expensive and least expensive items and often apply an inexact sense of value.

Looking back at market research in 2009 on the Phuket Hotel Market on broad numbers, it was apparent that brand premiums were in place on pricing and that in many cases travelers were willing to pay a little extra for what they considered the known benefits of a brand.

Certainly there remain key exceptions such as the stunning success of independent hotels like Twinpalms in Surin Beach, but examining pricing going into low season is going to be interesting to see exactly what the numbers will bring for the islands branded and non branded establishments.

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