Airline seats have largely become a commodity now, with consumers willing to forgo brand loyalty, perks, and comfort in order to save a few dollars on their flights. Over the past few years we’ve seen the rise of low cost carriers in Europe and the popularity of the model there has caused it to expand into the American market.
From the East Coast, traditionally the Caribbean’s strongest American geographic market, you can get tickets to Iceland, England, Germany, and France for as low as $400 round trip now, and I’ve even seen some deals come through my inbox with even lower fares. A recent promotion from WOW air had round trip tickets to Reykjavik for $229 from NYC (and there was a similar fare for their Miami to Reykjavik route).
There are very few places in the Caribbean that you can go anywhere round trip for $229. Compare that fare with a typical flight from a Florida hub to the Bahamas (where Exuma & Eleuthera averages around $390 and the Abacos are over $400) and suddenly exploring Iceland is looking better than sipping tropical cocktails next to turquoise waters.
The low cost model is going beyond Europe though, giving American travelers options they’ve never considered before as it’s no longer cost-prohibitive for them to venture further afield. Emirates airlines now flies from Fort Lauderdale to Dubai for around $800. That price is comparable to a round trip ticket to Saint Lucia from Miami, which tends to however around $700.
Because of all this consumers now feel as though they are seeing a loss of value when travelling to the Caribbean. The above Dubai vs. St. Lucia example shows how in a traveler’s mind they’ll look at the value of a 14.5 hour flight and compare it to the 3.5 one.
And when you look back to our topic of discussion here, when consumers start comparing a jaunt to their favorite Caribbean island with a flight to Europe that costs the same or less than what they’re used to pay to take a flight south, it doesn’t do the Caribbean tourism and hospitality market any favors.
But, there are ways to combat this perceived loss of value and one way is to recreate it.
For example: If you’re going to run specials, run specials that give ‘airline credits’ – this will lower the cost in the mind of the consumer and create perceived value. The Virgin Islands recently did something along these lines with a campaign that is giving travelers $300 to spend once they arrive in the islands, which is basically the cost of getting there. Not only did this help counter carrier cost, but it also counteracted the devaluation of the pound and Euro that have made travelling to and spending money in Europe more appealing.
So, until we have an influx of our own low cost carrier models into the Caribbean, look for ways to show value to the consumer and to offset carrier costs to make getting down here globally competitive again.5