Adding Value v Value for Money

First published on Friday, January 24, 2014

A recent report by VisitEngland entitled “Future of the Staycation – 2014 and Beyond” took a look at the potential impact of the recovering economic situation on the domestic holiday market (i.e. people choosing to take short breaks within the UK rather than head off overseas).

Whilst the country has been under the spell of recession, and with it the uncertainty regarding job futures and so on, many people have opted to take shorter breaks for holidays, and stay within the UK to do so, thereby saving money on more expensive overseas breaks. There has also been a shift in holidaying behaviour in that shorter breaks have become more popular than full week or even fortnight breaks, and quite often they are being combined with ‘duty’ visits (e.g. weddings, trips to see family and friends). Additionally, and often to the frustration of those running tourism businesses, there is a definite trend towards later booking, for various reasons from weather watching to just not being sure of the cash-flow.

However, potentially, things are the on up in the economic sense. Unemployment is dropping, confidence amongst in the business world is increasing as employers begin to expand their teams once again, and the markets seem to be showing definite signs of recovery. With this however comes mixed news for the tourism industry.

On the one hand, increases in disposable income can be great news. Visitors may be more inclined to splash out on dinner out, or a family day out at a theme park as part of their holiday or even extend the duration of their stay. They may upgrade the standard of their accommodation or even try a different, more costly, holiday.

On the other hand, and being fairly blunt about it, they may decide to vanish overseas for a few days instead.

Of course, no one is going to instruct anyone considering a holiday on where they must take said break, or how much they must spend or how long they must stay. However, businesses can play their part in influencing those decisions.

There are various ways that this can be done, and the savvy business operator will already be thinking about this, and acting on it.

  • Marketing – if a business has spent some time doing a bit of research in to their target market, combining what they know about their existing customers, and finding out about those they wish to attract, they will be designing appropriately targeted campaigns, and monitoring their impact. These days, a lot of that activity is likely to be digitally based, but it is crucial to be doing it and doing it well to catch the eye of the customer.
  • Value for Money – Whilst there may be a little more cash floating about than previously, the customer is becoming increasingly clever with their spending. The growth of sites such as Groupon and Wowcher go to show just how popular ‘bagging a bargain’ has become, and indeed the stats on the changes in shopping patterns in the major supermarkets also provide a usual indication on consumers being far more concerned about value for money. Obviously everyone wants to get value for money, and to get that money to stretch as far as possible, however this does not mean that a business has to keep on cutting away at margins to deliver this, after all they have to make a living! So that’s where ….
  • Adding Value comes in. Imagine you’re doing your shopping, and you’ve a choice between two comparable products, both at the same price point, both delivering the same end result. One of them however has got the upper hand, offering either an extra quantity of product, or maybe something like a gift or voucher towards something else. Which are you likely to choose?

When we talk about adding value, it can mean a range of things. In some cases it will be simply adding in a little more than usual (two biscuits with the coffee instead of one), but in others it can be about adding something that will enrich the experience for the visitor, and/or encourage them to return again. The key here however is to ensure that the value being added makes a positive impact on the end user/consumer, whilst not causing financial hardship for the business owner.

A well thought out combination of value for  money and added value, combined with a sensible, targeted marketing campaign will enable a business to offer a very attractive proposition to a potential customer. In doing so they will be giving themselves a fair chance in the broadening market place, and maybe tempting the visitor to consider remaining here in the UK for their holiday rather than heading off overseas.
NB The report focuses solely on England, however many points remain relevant.

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