What do the Travel/Hotel Companies Achieve?

strawberri_shortcake

I'm so sorry if this has been asked before.

When companies give away, for example, two week holidays to somewhere exotic with everything included, what do they gain from it? Sometimes the win is with a third party (e.g. Best Loved Hotels give away weekends).

It's just something I always wondered!

gizmobenny

strawberri_shortcake wrote: »

I'm so sorry if this has been asked before.

When companies give away, for example, two week holidays to somewhere exotic with everything included, what do they gain from it? Sometimes the win is with a third party (e.g. Best Loved Hotels give away weekends).

It's just something I always wondered!

You have just answered your own question.. Best Loved Hotels... you remembered their name .. publicity and word of mouth is why they do it.
Personally I always make sure I thank a company on the social media site where I won the prize.

strawberri_shortcake

Thanks for the reply!

I understand with the weekend wins but the all inclusive, two week, exotic holidays? They cost an absolute fortune! Is that person's word of mouth really worth it?

duchy

Say Thomson give a prize of flights and hotels -to say ASDA.
Thomson get their name havilly featured in the ASDA magazine and the hotel gets a photo and the name too (so likely in exchange have given the hotel room for nothing)

Thomson get the "advertising space" as do thre hotel -and possibly the airline too....ASDA get an attractive competition to put on the front cover of their magazine and an incentive for their customers to look through their brichure or newsletter or website.

The costs are spread -and are tax deductible .

There's definitely something in it for everyone.

Holiday companies all have a promotions budget- spending some of it on a competition gives them wide coverage- it's not just the winner -every person who enters the competition is reminded of that holiday company - and already has an interest in the kind of holiday been promoted ...or they wouldn't be interested in entering to win.

gizmobenny

It must be or they wouldn't do it.
I won a fabulous skiing holiday for 4 early this year, it included everything, catered chalet, food, ski lessons, equipment hire and lift passes.. all they wanted was a few pictures on their website and Facebook page

strawberri_shortcake

Thanks guys for the replies. It's always bugged me!

One-Eye

I agree with the previous comments. You also have to look at the marginal cost of prizes, rather than the price if you were to buy it.

eg. Free entry to Theme Parks and attractions, travel tickets etc. - marginal cost is zero as the train/plane/boat would run anyway and the theme park would be open and a couple of extra customers makes no difference.

Meals/hotel stays/haircuts/spa days etc. - the marginal cost is very low amounting to just the cost of food/products consumed as the staff would be paid anyway if you were not there. The cost is higher only if you take the place of a paying customer (this applies to free tickets to Sold Out events).

Tangible Goods - electrical, food etc that can be delivered to your door. - marginal cost is fairly high but is still only about half the retail price.

Cash/Vouchers - Marginal cost is 100%.

luckylady7

A travel company/hotel taking out a full page ad in a mag or newspaper would be charged thousands more than it costs them to give away a free holiday, even an all inclusive one. So it's cheaper but also great publicity because you are now thinking "wow, what a great company for giving away a prize like that" and are more likely to remember the name of the company for when you next make a booking.


HTH xx