As the strength of the rand continues to fluctuate to the extent it has over the past six months, pricing of any nature becomes an issue of much contention in South Africa, says Satsa CEO, David Frost.

He points out that the debate over BAR vs STO rates will continue to rage on with this fluctuation and a sustainable approach to pricing needs to be reached for the survival and success of South Africa’s tourism sector.

This year’s Satsa Conference will again include a session looking at rates.

“In the age of ‘Big Data’ and omni-channel shoppers, retailers and manufacturers have an excess of information at their disposal to create dynamic prices,” says Frost. “Competitive entrants like AirBnB, Uber and new low-cost airlines have disrupted the tourism market and the notion of dynamic pricing in this space.”

He points out that a key point this raises is the more active role of the consumer and how those that set the price need to be significantly aware of consumer insight and requirements. “Research suggests, however, that consumers may not always be content with a dynamic approach to pricing strategy, and that marketers and organisations must carefully consider the impact of dynamic pricing on consumer attitudes and behaviours.”

Frost emphasises that what is important for tourism service providers to remember when deciding on pricing structures, is to consider the consumer along with their own business revenue management.

“Supply and demand economics are generally the determinant of the rack rate and often this is not the most cost-effective rate for the consumer if demand is high,” says Frost. “An STO rate might often be more economically efficient when booking in advance, however the problem arises in the commission that the tour operator has to put in place to cover their costs.”

The 2016 Satsa Conference will take place in White River, Mpumalanga, from July 21-23.

To find out more, or to register to attend this year’s conference, click here.