Tourism Shapers | Pricing Strategy and Sales
Peace be upon you all welcome to the second virtual webinar Where we will be looking at pricing strategy and sales My name is Noor Nugali Assistant editor-in-chief for Arab News i would like to express my thanks to Saudi Tourism Authority for inviting me again to be the host for this webinar, supporting your journey in tourism and travel. Throughout this session we'll be focusing on the details the immaculate and accurate details for selling products and services across the world globally and actually and helping the inflicted industries through this pandemic. We would like to pose a question, how work and businesses will be during this new era of recovering economy and increasing awareness regarding safety and contactless interaction today we'll be tackling the pricing and sales strategy program and we'll be discussing these very important issues i would like to remind you that to answer the poll question here you will be clicking on the icon under the screen. The question 'What are the most important challenges that you are facing with your business regarding sales and pricing'. Answer number one ensuring maintaining competitive privileges of the project in the market or adjusting prices and increasing operational efficiency and determining the value of the project knowing which of the sales channels is the best to use and finally developing packages and offers that are suitable to the client. You will have the chance to ask our expert, Miss
Reem Garash about the tools required to support your journey and in business, if what you're looking for is a wonderful portfolio, our guest has her fine share of experience. She is the CEO of Shada Homes and she's been carrying out this business of her family throughout the past decade. She has had a hand in providing a number of job opportunities so let's all welcome Miss Reem Garash. Welcome Noor, I would like to also send my gratitude to in the beginning and express my thanks to Saudi Tourism Authority for inviting me as one of the experts within this webinar it's a wonderful opportunity to provide and share our expertise to the SMEs in this field and new startups. So as you can see KSA is intending to uplift the travel ban and open airports by the 17th May 2021 and that is of course going to support us, in getting back to our daily lives as it used to be. This of course
is coming at the same time with the summer vacation and the new holidays as well so we're going to tell you about the most important changes in the tourism sector and talk about the most important point here which is the change in the demand as you can see. The travel destinations have changed, everyone is now looking at spending their vacation and holidays domestically and internally. That is not the only change happening in Saudi Arabia, it is happening across the world as it shows the international survey conducted by World Travel and Tourism Council shows that around 60% - 86% of the tourists and travellers would prefer to spend their holidays in their countries for fear of being locked down in such country due to the lockdowns as you can see here, travellers last year were fearful just because of the pandemic but now we have the vaccination available therefore we would like to be ready to welcome visitors so we need to have the offers and packages that are compatible with this new trend in demand. The second point here is that travellers are now paying a lot of attention to health and safety procedures as you can see. Now we all have a very high level of awareness of
health and safety and that is now of course reflected in our behaviour as travellers. As you can see also the last survey from The World Travel and Tourism Council shows that 69% of the travellers added the caliber of cleanliness and safety procedures as one of the most important and critical elements in deciding their travel destination therefore i would like to advise you all to add this to your brochures and offers as one of the key important things that you do in your businesses. that we spread you are following the safety precautions and cleanliness and sterilisation procedures in your facilities that we have done Thanks to Allah this has had a great impact. You also you need to minimise the not needed unnecessary services around your facility to minimise any type of contact. This is going to have a very positive impact on your businesses. Of course that may
cause some losses but you can substitute that by increasing the prices a little bit and that of course is going to have a positive impact and let the visitors and travellers know that you are putting their health and safety first. Point number three, this element addresses sustainability throughout the pandemic and the lockdown we know that the quality of air has changed, certain types of animals have flourished in certain countries and you can see also the the life activity and the wildlife has increased as well therefore we are now all aware of our environment, we need to participate in the protection of our environment and increase the levels of sustainability we need to also preserve energy in our facilities through very simple behavioral practices for example these practices include turning out the lights whenever they are not used. For example in public spaces bathrooms or meeting rooms changing the type of lighting and the path of the the hallways and rooms into more efficient and power saving bulbs. Now the fourth element here is that
me actually being with you, via this virtual webinar is one most important pieces of evidence that corona has infected our lives. The latest survey and study has been done by the World Travel and Tourism Council where they discovered that 69% of people use audio visual applications like meeting applications like zoom and otherwise they are now being used when some haven't even been used before. For the first time 66% of consumers are now preferring to use the remote or online payment methods like apple pay so now all of the customers prefer contactless operations. Therefore we implement the automatic or self check-in facilitation or the self check and check out like the mini market as well so the client will be able to pay himself and buy whatever they want without having any type of assistance from anyone. Of course some of you may have questions about the customer happiness and satisfaction that may change if there's no one to help them actually this is not true, a study done by Ikea 50 years ago discovered that the client would be very much happy and satisfied and even loyal to the brand if they exert a little bit more effort to get what they want therefore we need to change our culture especially in Eastern Europe they changed the whole journey of the client through which they are using a number of applications which the client can use to do whatever that he needs to do and finish his service. Thank you very much for your attention
and listening. Welcome one more time, so what are the most important learned lessons and things that we have noticed in the change that happened with the travellers the first thing is, we need to be ready for the summer season and that is through the sales channels and by providing offers and packages that are suitable for their needs. Also the element of health and safety in your offer for sure because this is a very important element that would attract a lot of visitors. Also the implementation of sustainability practices and as well as implementing digital applications as well as minimising the contact through unnecessary services. That is going to be done through self checking and checkout and electronic payment and also linking the sales strategy with your growth plan so that we are able to compensate our losses throughout the coming period inshallah to see what happened last year.
Thank you very much Thank you very much Reem for these extremely valuable pieces of information now to be able to know the latest news and information in the development of tourist activity we would like you now to meet a pioneer who is guiding us in this new era, let's welcome the Vice President for Domestic Tourism at Saudi Tourism Authority Mr Muhammad Al-Bassrawi accompanied by Ms Bashuwair the founder of Adventures and Hobbies and Mr Mohammad Altraif co-founder of Shamal Adventures let's welcome them. Hello everyone first of all i'd like to express my appreciation for all the participants, i would like to thank everyone i am very much delighted that we have as many big companies as possible working in tourism in Saudi Arabia with what's going on. I would also like to express my appreciation and gratitude to you. Working with your heart and soul and of course we will be providing help for you to further your work in tourism at the same time of course, also looking ahead at the Kingdom's vision 2030. First of all i'd like to thank Ms Abrar,
because she has such a great tourism company working in tourism and also we have Mohammad Altraif, also working in tourism in a different company welcome on board both. Welcome, welcome thank you very much for inviting me and thank you very much for having me thank you, Mohammed had some problems, Mohammed are you there? On board, thank you OK, Noor asked a question about Tourism Shapers. I'd like to see of course the results of the poll and later we'll ask you some questions about the tourism sector. Okay the question, what are the most important challenges for you relating to policies, rates and pricing? The highest one is the answers at 25% knowing more about the providers channels and, something that will be asked to you later, about the competitiveness of the business in the market so you've got one company working in the same band width.
We have a group of questions i will ask you each Mr Mohammad, ladies first, and then later we'll jump onto you okay so the same, if we look at today what are the most important challenges we are facing in the tourism sector and how can we can overcome such challenges. I have two very important points the first one is how to provide the service that is adequate and is compatible with the client's desires and requirements and how can i showcase the beauty of Saudi Arabia and these wonderful sites on locations and provide him with this with the utmost experience, how can i balance between the experience requirements and the price these are the most important things that are facing the challenges. As you can see high price, high quality as they say so how can i provide a comprehensive service with an affordable price i found the answer to that is to provide a basic package and then i provide a comprehensive package a complete package and provide the client with options throughout which he can decide and design his own package that fits his own style and budget as well the second challenge is the variation in the prices as you can see in each season there are different prices therefore it's necessary to have a clear image that shows the difference in prices so that we can control the supply and demand in order to provide the suitable packages to satisfy the client and have great participation that is coordinated and successful thank you so much for your answer. Mr Mohammad here, welcome again i'd like to thank you so much and i'd like to thank the Saudi Tourism Authority for this great invitation i am very much delighted and honoured to be here as one of the participants for the pricing strategy and sales webinar, we focus on the northern parts of Saudi Arabia of course we work our own operations in taboo and these three regions are still very new in tourism where they have little or few services and it is very difficult for us of course to provide competitive or affordable or or fixed prices for the market so you sometimes might have like different guidance prices for the accommodation housing because the demand is so high in comparison with the different things available in the market on the market so it is very difficult for us to have like for like solutions for the pricing so that is why we know that our riveting efforts are going to be made and bigger projects to be realised. Of course over the coming years a lot of things will be provided such as pro services, products, we as organisers are also there to make it much easier for the different packages to be made available in addition to the pricing that are affordable for the client or customers, thank you very much. Before now you start your own business in the tourism sector and get more engaged what were the most important opportunities that you envisioned and seen and do you advise others to get engaged or to invest more Actually as i always say tourism is good news so in any type of business this would be very important in the tourism sector, it is going to also support all types of sectors for example food and beverages, transportation, airlines, hospitality producing families and artisans any type of sector is going to be an integral part of tourism is going to also benefit the rest of the sectors whether economically or otherwise from various sides and perspectives, even our own lives in the sector i prefer the hospitality element because i started my small company or small project in the organisation of flights and travel we provide the service of organisation of travel the whole experience so we need transportation we need hospitality we need food and beverages therefore i believe that all of sectors are in this. Thank you so much i don't want to focus
on one thing there are different subsectors or sectors, please Mohammed the first issues that's true as for what has been mentioned by Ms Abrar tourism is so wide and so promising so all more sectors of course feed in on this kind of sector so we work on the northern and western part of Saudi Arabia we find different opportunities, ample opportunities Frankly the most important which is the touristic guidance and based on the educational stages for the tourist guides as for the protocols like touristic guidance and the basic things in such a way that feed on or feed the different things for example having one standardised price and speaking about educational platforms for that can help the touristic guides and the other thing i'd like to say more about is that the allocation of certain areas such as like seaports for instance only seaport where we see it is very simple in comparison with the different renaissance of development and the growth in Saudi Arabia in comparison with the different countries where they allocation where they allocate of course Seaports for example and other issues where they can enhance the services provided and see this is a good opportunity for this private sector institutions. Thank you, that's true we are running out of time i'll ask you the last question of today. What is the proof the sales channels attract as many tourists as possible? Please Ms Abrar i'll start with you of course the number one with no competitor channel is the social media channel that's one of the most important elements that we need to focus on and the second thing is the satisfaction of the client if the client is satisfied and happy he is going to be our own vehicle of marketing the the client is a very very effective marketing tool so no one is going to be better at marketing than the client so actually digital and the satisfaction of the client are both the most important channels thank you as for the digital platform true this is one of the most important thing as we see from outside the user experience because he has a good experience such as like for example websites where you can have different experience like a car housing a plant it takes like just a few minutes this is the challenge and this is a good opportunity for the digital platform to think of a platform a digital platform where they can provide a lot of things such a payment platform where it can be much easier for the client for the services to provide in one platform where it can be much easier and provide different services in one platform thank you so much i believe there was a conversation between you and me most of people would say they use the direct payment or transfer and i think that it needs to be like now tourism touristic platforms and different programs and courses for the people. This is the final question of course in our own time on what's going on and certainly i'd like to thank everyone so much. Ms Abrar i'd like to thank you Mr Mohammad as well thank you ever so much your attention is highly appreciated and thank you for your own contributions, highly appreciate a piece of information for the audience. i'd now like to go back to Ms Noor thank you so much. Thank you thank you so much as well
Thank you very much for this very fruitful and rich conversation thank you mr Muhammad Bassrawi and Ms Abrar and as well as Mr Mohammad Al-Taraif thank you very much now we go back to Ms Reem Garash to give us very unique ideas and about the strategies of pricing and sales and how to manage sales channels and its secrets. Welcome Noor, one more time welcome to our dear listeners i would like to give you a brief overview of the strategy of pricing and sales that's a very important topic i would like to cover all of its aspects as soon as as brief as possible we'll start with the most important three strategies for determining the price the first one is pricing through the calculating of the cost then competitive pricing and third is pricing based on the added value to the client the first one don't be don't get worried because of these uh calculations and stuff that's it's going to be very easy the first one is getting through calculating the cost pricing through calculating cost previously i used to when i used to run my own business i didn't have any accountants or anyone to run the financial stuff so i would in order to account to calculate my price i would calculate the complete cost of the previous month and then divided on the occupancy level and that would then give me a rough idea yes a very rough idea very simple it wasn't realistic and it wasn't accurate but when my business grew the costs i've tried now to divide the costs into change in cost and fixed cost so now you can see here the equation is as follows the fixed cost plus the total fluctuating cost and then divided by the products sold for example the seats and tourist tours and occupied rooms and so on and so forth so when i did that we can see here that i to explain more the fluctuating cost is for example the price for cleaning anything that is different that varies according to the demand and the other fixed costs are of course the rent transportation and so on and so forth as for the fluctuated costs is for example tour guides and tour and tourist organisers who would determine their price according to the number of clients so they determine also for example the meals the gift bags and so on so these are variable or fluctuating costs that conclude includes of course the the cleanliness and laundry and so on and so forth now let me explain the second type of calculating pricing which is the competitive one i did this on purpose, giving you a google map picture you can see here how you calculate this is by looking at the surroundings you're all in the same category you're all in the same location you are all three to four stars or and you're all serving the same, you're all the category for example business category, so you check the prices of the other hotels you check them on the various channels. You can ask them whether online or go visit and and you will find of course someone who another hotel that is having a higher level of price than you are and someone with a lower price rate than you have so as you can see here on the map you can see here this is a picture of Riyadh you can see hotels, central and business hotel all of them are serving the same category with the same within the same position at the same location so as you can see here what you do is that you calculate your pricing lower than your competitors and this is a mechanism by which you get to know your uh competitors and if they raise their prices you need to know why they did that that means they have an information that you don't so you need to be aware of all of the events and conferences that are going to happen surrounding your area you also need to be in contact with Saudi Tourism Authority because they have information regarding the different seasons whether it's Winter or Summer in order for you to be ready with your pricing according to the high or low demand also you need to be in contact with the Ministry of Sports in order to know when are the major sports events are going to happen in your town to be ready a third way of the pricing calculation is calculating the price based on the added value to the client as you can see here you have a different type of experience you have a water park or a theme park next to your hotel, so you have a very famous brand like Shangri-la or you have a specific unique location like beach or a wonderful mountain view in this case you determine your own price according to your cost and at the same time check the prices of the competitors so if you choose whichever way of the different strategies you need to implement the dynamic prices this dynamic prices i implemented it since 2016 and our revenues have increased from 20% to 30% thanks to God so in the hospitality sector we have prices four days in the week and the weekend so of course the weekdays have less prices than the weekend but of course that has a waste of potential income so Riyadh is very seasonal so it's different than Jeddah so the town itself although the city itself is different from one city to the other therefore you have to have dynamic prices so we have three bars or three layers of pricing each price is dependent on the type of request or demand for example one of the mistakes that i have made is that when we found that our prices had increased sorry the income is increasing we implemented it throughout and that was very hard to train it was very hard to train the reception, the receptionist and the sales people on how to implement it because the theory is different by practice so the turnover was in tourism in general very high so once we train an employee once they are aware of the dynamic pricing they would leave and a new employee would be selling with a first tier or the first pricing the lowest price well he should be going with the third price therefore we implemented a manager and a single employee. We implemented a program to handle this to avoid human error now we go to the sales channels so once you have more sales challenge you have more exposure to the client that could be either direct channels or indirect channels and of course these channels they have their own commission it varies from 15% - 30% you could either do it manually or connected with other managers for sale channels like connect or GDS so i will let you know now about a number of these sales channels let's go now let's hope that time allows us to cover all of the direct and in a direct sales channels let's start with the direct sales challenge the most important thing is the electronic website and the booking engine whether a hotel a guide or organiser you need to have your own website with your own brand you don't need to pay an engineer to design a whole website you can simply take any ready-made template online there are a number of channels and electronic solutions ranging from five dollars you can pick a wonderful website with different templates you can choose whatever fits your business you can insert all of your services in it and also the guys they can insert their own packages with electronic payment methods also the walk-in the second direct sales channel is the walk-in we still have a huge number of walk-in those people who need to come themselves and book their service so those clients they don't believe in it unless they see it with their own eyes therefore you need to be ready to receive such clients because if you turn them into loyal customers you will have it forever. The third here is the telephone and the fourth emails, let me explain this point to you personally, the contact information of your clients is your own fortune and also the contact information of your personnel is very important never give personal emails or phone numbers to one of your employees or to the client because usually you should have the package emails by which you have a domain for example sales@ or booking@ or whatever and the email because of turnover as well because employees change so you need to have the email and the phone number of the hotel connected to the hotel itself not to employees not to individuals now let's go to the indirect sales channels there are so many, you have for tourism operators and some of them are for hotels let's start with the ones dedicated to hotels, let's start with the online travel agencies like Booking.com and Expedia and so on these channels work from business to customer therefore you just need to register on these channels to contact their email on their official website and then connect with them you upload as much as much information and picture as you can from your hotel and that will give you more exposure and you would deal directly, they deal directly with the clients who book through their website the second one is the wholesaler the whole sellers are the channels that buy a big number of rooms and at the same time you should give them a very big discount sometimes this may reach 30% personally i didn't like dealing with them because they caused a lot of problems for example we found prices on my website are not the same as their prices on their website and that caused a lot of problems actually so for example trip advisor have a blog to explain more on the problems of wholesalers and also OTAs i am going to give you the links for such articles number three is the meta search, meta search channels they take your information and prices and they broadcast it to all of their websites you have no control over it you cannot post anything on it so so all of the clients would compare this and these channels would compare your prices.
The only problem is that since you have a lot of channels and you insert all of your information and prices manually you may have different prices on different channels and that may cause a problem because it's going to be very embarrassing in front of your peers because you they would find that you have different prices on different channels so you need to have a channel manager in this case the channel manager as i said before GDS and other channels the channel managers they would do this job easily now the global distribution system is a very complicated network that runs that provides the link between the service providers airlines and tourist organisers so i would just give you information that i recently discovered the most channels to manage travel managers they are owned by these four companies for example connected is owned by traffic like As you can see here the tour operator is the final channel here when we deal with the tourist organisers they come and book the room and the tourist package so actually i haven't dealt with a lot of them i have just dealt with two of them some of them are currently available here it's a little bit close to the same manner wholesalers work they book a big number of rooms and also you need to provide them with a big discount so they are certain they have their own clients from 3% - 5% but i decided to stop working with them since they always force you to have a minimum amount of availability of occupancy rates or occupancy level that caused me a lot of problems in the high seasons so now we're going to go through one more time the lessons learned in our talk today so i believe that the best strategy for pricing is to take a consideration all of the strategies that i've mentioned if you want to implement the first strategy you need to take also take into consideration the competitive competitors element and the dynamic one for example you need to be aware if you want to implement the policy of the competitive pricing alone you may have a very high pricing rate and that may cause you a lot of issues and problems because it some other clients or sorry some other competitors may sell it at a lower price so you need to put in consideration all strategies the second point is the first mover or the fast follower which means you need to be acting very quickly for example in one of the few individuals i know they had for example a client had information about hotels for Marriott and other hotels and she and other clients were very sorry the organisers were very happy and they let me know about all of the information that they had it was a very very rich experience for me because i was the first person to move and go to the hotels and other providers in order to get as much information as possible that gave me a very good advantage and now the rest of my peers are now in contact with the hotels and so on in the field of hospitality, and number three is to be always informed you need to be always informed i always visit the ATM which is a part of the world travel market, they have conferences in April and May and also attend all sorts of conferences that would actually impress you with the level of development and advancement that is going on. Another thing here is to have a guideline for policies and procedures that you use in training your employees for me i wrote them from scratch but you don't really have to do that you don't have to go through all this trouble actually resources are available you might have references for policies and procedures on free websites like you can actually translate them and adapt them to your own operational manner. Thank you very much for your patience and for your listening. Welcome one more time Ms Reem, welcome i would like to remind our listener that they have the opportunity to ask on the screen whatever we want in this field and hopefully we'll be able to answer i know that we have benefited a lot from your information, it was very valuable and wonderful and rich I have a question for you before we take questions from the audience please thank you, of course we know that Shada is very famous and i would just like to know more about you starting this business how did you start and how did you compare yourself globally? in the beginning we did not really think that there would be any type of competition, my mum founded this business with my father so she wanted to serve those who are like her so her target customer were people like herself so you find like she designed the room in a way that suits her as a mom and as the answers the rest of the family as well so that's what i did i targeted myself and those who are like me and found the ways that would make my experience more comfortable so actually most of the female ladies in Saudi Arabia were jobless so when we started this business most of our employees had no experience someone who started with the reception department and someone else was the manager of rooms and booking and we started on job training i started working in 2007 i was still a student in college i wanted to be able to help her and finish my studies so i graduated in 2011 and at that time thanks to Allah we as a family were able to like pitch in with our own experience with our own vision with our decorations and the design and also the structure and the construction and architecture as well and we actually were able to hear the positive feedback from our clients thank you very much that's great and wonderful actually to be able to make yourself as the target client that is actually impressive so now we'd like to open the floor to the audience and see what are the questions and answer it for me the most important thing is to read the journals and all type of information available in this field and also the most important tool is to attend conferences you have no idea the amount of information and exposure you get from international companies that are there in these conferences and actually all of the participants helped me in my business and my understanding of the terminology used in this industry because it's actually as i told you, it was on job training i was graduated from business administration and none of my family members had experience in tourism therefore we've learnt as we go as they say okay the most important thing that you could do is to fix is not to fix your prices actually you need to have a a futuristic view you need to have a plan for the future and give a price and stick with it and we take the corporate trades from other corporates and then we provide a lower rate so that the websites and the sales channels can posted and distributed and this way i think the contact and cooperation with us is going to be very fruitful our relationship is very happy for example this specific company takes from me my hospitality sector they book 20 to 30 rooms per month and that is because once you reach maturity you are in a very fluctuating period so once you reach maturity you are able to contact airlines or hospitality companies and can have fixed rates for them and that would help you a lot sorry i believe as i said before now the Ministry of Tourism and the Human Capital Development Program and all of the other programs and training sessions, like this webinar that is being conducted by the government in order to develop the sector i believe is the best way to raise the level of the capacity and capabilities of the local businesses because i believe at the start of my career it was very hard to get the information so i believe now that it's very important to have what we are having right now and you need to have the will to start the project whether in the funding, i believe that the tourism fund is doing great also i say is doing great and the the ministry as well so the Saudi Tourism Authority is actually promoting the tourism in Saudi Arabia in a wonderful way so i believe you need to have the will to start i believe that what is happening now is very helpful for example the songs, the songs done by Abdullah and other this type of marketing is very important so once you set the information and when you send the information the client's view of the product and of the destination is going to change completely so i'll give you an example 2005 type of individual who would say that i want to stay inside the Katrina don't want to travel abroad they would look down on him but now everyone would like to go to either AlUla or to another destination domestically, locally so changing the destination now is actually impacting the client's decision in taking or deciding on their location or the destination of their vacation so i was one of the individuals actually to spend my vacation in apa last year so for me Noor, I and my family ever since we were young we would go London or Paris or whatever across the world we have to go and spend the last week of summer in abha so that we have such balance between domestic tourism and foreign tourism as well. Thank you very much for all of the information that you provided us with we actually did learn a lot thank you very much. It was an honour to be here one more time i would like to thank Saudi Tourism Authority for the invitation and for its wonderful effort for creating this series of a webinar thank you very much welcome one more time and we hope that you have benefited from this wonderful webinar and now we go back to the poll, to answer please click on the icon on the screen what is your evaluation of this session 'Pricing Strategy and Sales' you can see here that it was interesting or it was relative but it's not as interesting it's not related to my situation or i can use it in my business.
Ladies and gentlemen by this we reach the end of this webinar i would like to thank our speakers for their valuable participation and ideas i would like also to thank our listeners and viewers i would like to thank and send my sincere thanks and appreciation to Saudi Tourism Authority the third session is going to be on the 21st April, where we are going to discuss how you can 'Master Your Marketing' and how can we make the best of the opportunities that provide us please join us in the series of Tourism Shapers in which we will continue building the future of Saudi Arabia together thank you very much for being with us and have a good night.
2021-03-30 13:58
