What is the appropriate pricing action facing an exceptional social event?

As a matter of fact, the “gilet jaune” protest (yellow fluo jacket) currently happening in France has an impact on tourist perception of this country as a holiday destination, especially just before the Christmas gifts rush of December.

But the hardest social protest is hitting La Réunion, a French island in the southwest of the Indian Ocean. France has deployed soldiers to calm violence after protests over fuel tax hikes degenerated into looting and rioting. In the middle of the peak tourist season, it is not the best image to promote the destination now but also in the long run.

Keep calm and analyze

The revenue manager in charge of pricing can get an instant overview of market prices with the rate shop analyzer of WeYield. By comparing the last rate shop retrieved with the previous survey stored, it is quick and easy to analyze which company has triggered a price reduction.

Capture d_écran 2018-11-27 à 18.02.40

What is the pricing action I should take during this difficult times?

Clearly nothing: keep calm and wait.

Two reasons why:

  1. some travelers who have booked their holiday during this period will try to either cancel or to postpone them. It the travel conditions do not give any room for a trip change, the clients will come anyway. No price drop will generate any additional demand because La Réunion island is not the best spot to travel to right now.
  2. the one who has to go there for any particular business or family reason will fly anyway no matter the prices.

So, do not over-react and leave the revenue managers who want to decrease their prices going down. It will not generate any additional demand and simply dilute their revenue.

Eventually, increase the price. For the traveler who can not make any other arrangements, the travel is the only option. So, a smart revenue manager will be on a volume fall by a better price per day.

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