Wednesday, May 14, 2014

Price vs Value: When Cheap Is Not Always The Best Value

When consulting with clients about their upcoming vacation, I usually ask the all-important question...what is your budget for the trip?  Quite often I get the reply, "We want it as cheap as possible."

But do you really want the cheapest vacation possible?  What if the cheapest price consisted of the smallest room at the resort in the furthest spot possible away from the pool, restaurants and beach and adjacent to the employee entrance and trash dumpster?  What if the cheapest price possible meant that you flew on a flight that left your home airport at 5:30am, connected through 2 different airports, had 2+ hour layovers at each airport and did not arrive at your destination's airport until 8pm that night?  And coupled with that, what if the cheapest price then included a shared transfer that stopped at 3 different resorts before finally stopping at yours...1 hour later?

Does that "cheap" price sound like a bargain now?  This is why value has to trump "cheap" price.  So many of us pay $3 or more for a java-house coffee than what we would pay for making a cup of Folgers at home because we put value over price (better experience over the cheapest).  But when it comes to the life-long memories we will make on a vacation, so many think "must go cheap."

So let me lay out what might be a better value and experience over the one I just painted earlier.  Now you leave your home airport around 7am, you connect one time with a 1 hour layover and arrive at your destination's airport @12:00pm.  Your travel consultant has arranged private transfers for you.  You get through customs and you are greeted by a person who is now your personal concierge for the drive from the airport to the resort.  He or she chats with you on your drive about the things to see and do and you and your traveling companions are the only ones in the vehicle and the only stop is your resort.  You arrive at your resort and are checked in by 1:00pm.  You are escorted to your junior suite overlooking the blue waters of the Caribbean.  You change and are at the pool sipping your first umbrella drink by 1:30pm.

Now, scenario number 2 is not the cheapest option for that trip.  But which one has better value and will offer a better overall experience?  Imagine you paying for scenario number 2 and you sit at the pool (the next day) by someone who has paid for scenario number 1.  You both left the same hometown airport, you are at the same exact resort.  But the person who paid the cheapest is telling you that he paid $200 less than you did.  If you didn't know the details of their package, you might think, "Hey, that is not fair. I paid too much."  But if the scenario number 1 person was honest and told you about their long layovers and that their luggage got misplaced between connection 1 and 2 and they missed out on dinner because they arrived too late and you can smell trash every time they open their room door, would you feel like you then paid too much?

Should "cheap" always be the driving factor?  I say no.  But here is what you can do to help your own personal travel consultant; come up with a budget that you would be comfortable spending for your vacation.  Let your travel consultant know that upfront.  He or she has knowledge of what a good vacation will cost for a variety of destinations.  And if your consultant says, "It will be difficult to put together a GOOD package to that destination for those number of nights for that budget," listen to him or her.  Make adjustments necessary such as cut back the number of nights or possibly think of an alternative destination, or possibly look at a different budget etc.  But whatever you do, don't run out to the internet and think your "cheap" vacation you just found is apples to apples to what your consultant was trying to advise you about.  That cheap vacation may be just