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Budget blues, is luxury the way forward?
Thursday, 18th September 2014
Source : Martin Kelly

Budget has been the travel buzz but when all you’ve got is low prices, where do you go when Plan A doesn't work? 

That’s a dilemma the budget travel sector is facing right now.

Being cheap is proving to be a fatal flaw and begs the question: could investors have been looking in the wrong direction " is luxury travel the better long business model?

Think about the advantages " lots of room to move on prices, up or down, plenty of opportunity to value-add, and high barriers to competitor entry.

Add to that strong growing demand among travellers from all income brackets and backgrounds for a luxury experience.

An interesting argument, don’t you think.

Let’s pause, let’s take a step back and look at the pros and cons of  each sector.

Low Cost Carriers hit the travel industry like a slap in the face. Not just innovative " revolutionary.

Ryanair led by provocative CEO Michael O'Leary got the party started by slashing airline operating costs and airfares while expanding at breakneck speed.

It was a spark that lit a fire.

Millions of people who previously could not afford to travel due to high prices charged by the so-called legacy carriers were now able to do so.

Other airlines followed before branded budget hotels got in on the act quicker than you could say “ancillary charges”.

Budget " the travel business model of the future!

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