I saw this in a travel agent window today whilst myself on holiday in Scotland and found it deeply troubling. The advert is offering 7 nights all inclusive in Cancun Mexico flying from Glasgow in on June 13th (14 days time).
The return flight will be an overnight flight so the offer is in fact 6 nights in the resort, excluding the airfare this equates to £83 per night for an all inclusive resort. I did an internet search for a flight only deal and came up with £350 on Thomas Cook and fares starting at £766 for scheduled service airlines. In short there is no way that this holiday is being sold at anything other than a substantial loss for the tour operator.
I have been in the industry for over 20 years and have seen this sort of pricing many times and it always ends in tears, everyone in the supply chain is being squeezed on price to unsustainable levels as a result the holiday will be of a relatively low standard and probably not what the person buying it was expecting. The tour operator will be losing money on the holiday so at the end of the year, if they do this too often, it will be reflected in the financial results. Selling your product at less than the cost of production is never clever.
I have no idea what work conditions are being offered by the Hotel in Cancun but I would wager that they are substantially below “fair trade” wages and are likely to involve a lot more that 40 hours a week. Sadly I don’t suppose that the average “Joe Tourist” will give this a second thought.
So why do they do it? Well.... they will probably have entered into a commitment to fly from Glasgow to Cancun between May and September and they will have purchased a number of hotel rooms in Cancun. It is widely known in the industry that a seat on a flight that has already departed has no value. The tour operator will sell the seats and rooms for almost anything they can get as £500 of income is better than nothing at all. The problem is that the punter in the high street knows this and will wait for the last minute to buy the holidays as a result the tour operator ends up discounting even more packages and so on and so forth until it either “wakes up and smells the coffee” or goes bankrupt.
Either way I don’t see any winners from this sort of pricing and I feel very sorry for any UK based hotel trying to compete against this sort of stupid pricing and I hope it stops soon. If it was not going to cost so many jobs I would like to see this tour operator, whoever they are, go to the wall.