Post-COVID-19, hospitality pricing will need to be given a great deal of thought by all players in the industry, says City Lodge Hotel Group COO, Lindiwe Sangweni-Siddo during a recent webinar.
Sangweni-Siddo said during the period of quarantine and isolation (lockdown levels one and two) the Minister of Tourism had released a Gazette allowing players in the industry, especially hospitality providers, to collaborate about pricing. “It is not something we would normally do because we would be in contravention of the Competition Act, but in this particular space we could.
“We have now all gone back to the competitive space and the understanding that we all need to bring our businesses back online and survive. The big question is: what is that price going to be?”
Sangweni-Siddo said pricing needed to be considered competitively, remembering that everybody had been affected, and discretionary spend was not going to be what it was in the past. “If we are expecting leisure business of any form, we need to remember that the man and woman on the ground have a much thinner wallet, and less spend. So as we open up, pricing of our product is going to be very important. We don’t want to be in a situation where we enter price wars. This is a wonderful opportunity for players at the table to start looking at packaging. Packaging of hotels, restaurants and travel of all forms will make it attractive to come out, shake off the cabin fever, and start travelling and rediscovering our country.”
She added: “Corporates are already asking for a reprieve, and for us to go gentle on them with pricing. A lot of us recognise that there will be very few price increases, but with a delicate balance. Remember, if I don’t give you a price increase, how do I manage my business through all the inflationary aspects out there?”
Sangweni-Siddo believes that although there will be some casualties along the way, the industry does have the ability to recover. “We shouldn’t take focus off regional travel. If we can stimulate that movement, we can focus on some sort of growth and demand. Going forward we need to look at the whole continent. Not only the region, but the entire African continent will be very important in our recovery phase.”
