The Price of the Month. Success or Failure?

10/2010: Holiday Trip in Tunisia all inclusive 699 €

Posted in Pricing by Jouko Riihimäki on 31.10.2010

Me and my family spent our fall vacation in Monastir, Tunisia. We chose an all inclusive service for the duration of the trip; the price included full board at the Sol el Moudardi Skanes Beach hotel. The price was 699 euro per adult. Tour operator was Detur Finland Oy. Although this was a vacation trip, I couldn’t help assess the trip and especially the all inclusive model from the viewpoint of pricing. Therefore my assessment is this time based on personal experience.

Key questions?

    What does ‘all inclusive’ mean in traveling?
    Who are the target group of all inclusive trips?
    Why should all inclusive service be offered to customers? And why should customers choose it?
    What is the possible significance of all inclusive from different viewpoints?
    Was the all inclusive service worth the price?

What does ‘all inclusive’ mean in traveling?

With package trips, all inclusive usually refers to the stated price which includes all meals and possibly even drinks. The meals usually consist breakfast, lunch, dinner and snacks. The drinks are usually soft drinks or local alcohol beverages. In some destinations, the all inclusive price may also include daytrips or other activities.

In our case, all inclusive included all the services the hotel area had to offer. However, it did not include daytrips and games at the hotel arcade meant for the youth.

Who are the target group of all inclusive trips?

All inclusive trips are often chosen by tourists who wish to remain at the same destination throughout the entire trip. It may prove especially beneficial to families with children, who may base their choice of destination on easy mealtimes and on knowing the costs in advance. Similarly, people with physical disabilities might enjoy the ease of the all inclusive arrangement.

Why should all inclusive service be offered to customers? And why should customers choose it?

With this model, the suppliers (tour operator and service providers) can offer their customers economical alternatives in more exotic surroundings and minimize the uncertainty factors the customer may have in terms of the destination, such as meal prices and quality. In addition, the destinations in the country of destination may be located in different areas, even quite far from cities or population centers, therefore having only few alternative services available.

The all inclusive service should be chosen for the duration of the vacation, for example, when the price level in the country is high and eating out will thus be expensive. In addition, the service is good for customers from countries where the standard of living, and therefore the costs, is significantly higher than in the vacation destination. This way the total price, including meals, will remain at a reasonable level.

In our destination, both the location of the area outside population centers and the lower price level of the country applied extremely well. The hotel, and all similar hotels, was built outside population centers. The nearest larger town, Sousse, was located 10 kilometers from the hotel. Moreover, the purchasing power of a Finnish consumer is about five times the purchasing power of a Tunisian consumer (purchasing power parity method of GDP). With this model, the hotel was able to keep its customers within the hotel area and, at the same time, enable the maintenance of a vast selection of services in a cost-efficient manner.

I’d like to state ease, the transparency of costs and the purpose of the trip itself (sunny and warm climate) as the key factors for my personal choices. It was an easy choice for a family with children as this way we could easily ensure a certain level of services with costs determined in advance. Our group consisted of four adults and five children.

What is the possible significance of all inclusive from different viewpoints?

From the viewpoint of the tour operator, the most important phase of the all inclusive model is the selection decision of the customer. In case the selection criteria of the customer includes ease and predictability of costs, and potentially economic efficiency in a more exotic location, the customer could be offered a great solution in the form of an all inclusive package. Without the package, these destinations might have trouble enticing enough customers due to the weaker traffic connections and more remote locations. As it may be very difficult or impossible to compare the price levels of different countries in advance, the tour operator can improve their own profitability by exploiting the different price levels for both goods and services without compromising customer satisfaction.

For the service provider at the destination, the utilization rate of their capacity becomes essential. Major investments made in the destination can only be paid back with a sufficient and solvent stream of customers. Cooperation with the tour operators at the home countries of the customers becomes vital in enticing the said stream of customers. In case the destination is large, as in our case, an affordable all inclusive alternative ensures sufficient demand at the location throughout the trip; the service provider will be better equipped to plan in advance the necessary services and the required products and suppliers for, for example, food and drinks.

From a customer’s point of view, the all inclusive model is easy and predictable. It suits various needs; it’s especially suitable for people who wish to move around the country of destination as little as possible. I think the greatest weakness lies in its strength. The attitude of “use as much as you want” can easily lead to excess usage of services and products, exceeding personal need. The customer will want to make as much use of the services as possible; in addition, the more they use the services, the cheaper they are. To me, this kind of thinking doesn’t support economic and ecological efficiency but the use of services is based on them being “free” and on consumption beyond personal need. In addition, focusing the vacation on one area doesn’t allow the travelers to get to know the real culture of the country. Of course, it needs to be taken into consideration that the customer voluntarily chooses to use the model.

Was the all inclusive service worth the price?

Now I’ll assess the actual price level of the all inclusive package in terms of my trip. I will go through the different elements of the services and assess them individually.

Flight

The flight to Tunisia went well. It lasted for about 4 hours and the service onboard was relatively good. In our case, the airline was Tunisian Nouvelair. On our way to Tunisia, an interesting thing happened when a passenger fainted in the aisle. This resulted in a minor panic but, all in all, the passenger was treated well. Nevertheless, little help from the other passengers (two nurses) was needed. The flight back home went well in all respects.

Three stars.

Bus transportation and basic guidance

The bus ride was short and went as expected. All guidance was normal and provided basic information on the destination and the services.

Three stars.

Hotel and cleaning

The check-in was very matter-of-fact. In our case, however, one of the rooms was located at the other side of the hotel and we had to ask them to change the room closer to the other rooms the following day. The hotel was relatively clean (four stars) and there were two large pools and a private Mediterranean beach within the area. According to a European scale, I would give the hotel three stars tops. The outdoor areas were inadequately managed and the maintenance of various areas, such as miniature golf, was completely forgotten. This seemed to be quite common in Tunisia as many buildings were incomplete or left at nature’s mercy.

Three stars.

Meals and other services (all inclusive)

Breakfast, lunch and dinner were all served in the same place. The selection, however, was fairly small and food remained the same day in, day out. The quality of the food was poor to my opinion. There were hardly any alternatives for vegetarians. During the last few days, you no longer felt like eating at the hotel restaurant as the tastes began to feel repulsive to some extent. Nevertheless, the children seemed to enjoy many of the basic foods. The selection could have been much wider and there could have been restaurants with different themes. Drinks were included in the all inclusive package but their quality was the same as the food’s.

One star.

Service attitude

I found the service attitude to be slightly fed up at times both at the hotel and in other places in the region. Smiles were rare and the most important thing was to get all possible money from the tourists, one way or another. It should be noted that the trading culture in the country is completely different from Finland.

One star.

The Conclusion

As a whole, I was satisfied with the vacation. However, from the viewpoint of the all inclusive model, the whole didn’t meet my personal needs and was thus below my expectations. When choosing an all inclusive package, it should be considered in advance whether it meets the needs of your vacation trip. I will think twice before choosing the package in question again. On the other hand, I found positive experiences on all inclusive trips at the Suomi24 discussion forum as can be seen in the writing by, for example, pen name Samaa mieltä (October 23rd 2007):

All-inclusive hotels are an excellent alternative, especially for families with children. Food – plenty of it and different alternatives – is always available, service is working and the hotels are well-managed and comfortable. But I do understand those who oppose all inclusive trips as I used to be against these kinds of hotels, too… until I tried them myself! I thought that you’re only really traveling when you do everything yourself and don’t spend the entire vacation at the same hotel. My husband and I (and now our children, too) have taken many kinds of trips from backpacking to all-inclusive luxury vacations; they all have their benefits. It’s the personal hopes and attitudes that matter! Therefore I wouldn’t be the first to reject the idea if someone wanted their vacation to be easy in the form of full board! We haven’t had full board in Cyprus but our experiences from the Dominican Republic, Mexico and Cuba have only been positive!

Pricing Stars (1-5):

Jouko Riihimäki, M.Sc., CPP Certified Pricing Professional

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