25 March 2005

Post Tsunami branding lessons

According to most reports, the number one reason tourists are canceling trips to affected areas is because of uncertainty about the destination, not because of the cost. And yet, firms such as Kuoni, for whom the Maldives, Thailand and Sri Lanka are historically their top selling destinations, has released a brochure of selected regions affected by the tsunami that features holidays where the margin is a paltry US$20 and half of that sum has been pledged to local communities.

Any marketing pro will tell you the line between business stimulation via pricing and the impression there is something wrong with a product, or in this case, destination, is fine. In the long run, heavy price cutting could backfire later on as companies try to raise prices.

Anyway, is there any reason to panic?

According to Somak Holidays, the answer is no. The long haul African and Indian specialists based in the UK, has launched a brochure covering eight countries and featuring 145 hotels in more than 45 resorts and cities in countries such as China, Cambodia, Indonesia, Malaysia, Thailand and Vietnam. Although they are not discounting due to the Tsunami, they are donating £5 for every flight-inclusive holiday sold from the new programme to the tsunami disaster appeal.

Anton Grossman, UK sales manager with Malaysia Airlines had the right idea when he said the airline had "taken a firm stand" and only waived cancellation charges up to January 10. His reasoning was that Malaysia has been less damaged by the tsunami than other regions and that by continuing to waive the charges it would have "confirmed people's misperceptions about the size of the disaster."

Most compelling of all, is a recent survey conducted by Visa Asia Pacific for the World Tourism Organization, that found that 65% of those surveyed said the tsunami had no impact on their travel plans to the region.

More interestingly, about 20% said the tsunami had made it more likely for them to visit affected countries, especially those from China (20%), the UK (19%), Canada (18%) and Sweden (18%).

There are many branding lessons to be learned from the Tsunami. The importance of consumers; repeat visitors, the need for brand ambassadors; the power of viral marketing and so on. But slashing prices to build a brand-that’s one lesson we should have learned already. It is a short-term solution that will, at best, result in a short-term sales spike. It will not build a profitable brand.


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