On the leisure side, Dimitris Hiotis, global head of leisure, travel and transportation at consultancy Simon-Kucher, said it was “too early” to talk of the death of low-cost travel.
He gave the example of Ryanair, whose recent results highlighted a 10% increase in passengers with only a 1% increase in revenue. “People have been burned by high prices; I think the spike was definitely temporary,” he said.
Hiotis compared this with staycation brands, which saw a price spike a year ahead of airlines as domestic tourism boomed, before rates then fell.
Sarah Sheppard, Sabre’s senior director of global product management, added: “We are seeing people prioritise value over price sensitivity. That has been driven by travel expectations.”
These included ancillary purchases like extra leg room seats and priority boarding, she said. “Research showed travellers will pay for additional personalisation. We had not heard this before, so prioritising value over price alone is here.”
The panel agreed that while revenue management systems had become more sophisticated, this would not end low-cost travel. “Airlines can’t just price whatever they want and travellers will pay,” Johnson added.
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