Backpackers: The next generation? - Scholarly Commons Home

Backpackers: The next generation?
Owners appear to set their accommodations’ prices based on their BBH
competitors in the area rather than by factoring in actual costs of production,
corroborating government findings (TRREC, 2007b). Only one respondent was
able to compare his assumptions about the impact of increased rates on guest
numbers with actual, historic records. The others did not use strategic pricing
histories or decision-making. The report (2007, p. 12) suggests that “firms that
did not incorporate their costs into their pricing decision tended to have lower
Financial Yield than those that did”.
Many have seen the market soften in the past few years, believing that the
changes have been brought on in part because of new members in the BBH
group, in part because of changes in international airfare and routes – some
carriers are now delivering clients directly to the South Island. However, none
believe that the exponential growth in facilities will continue, alleging that fewer
people can now afford to get into the market because of soaring real estate
prices.
Few are concerned about soft shoulder seasons, though six mentioned that those
are longer and deeper than ever before. Backpackers’ accommodation annual
occupancy is 43.7%, and has decreased by 12% between 2003 and 2006. This is
due largely to increased supply (35%) over the same period (MOT, 2007a, p. 2).
However, most owners appear relatively unconcerned:
We don’t run full all the time. I don’t know how you’d do that, really. But
we’re happy the way it is, gives us a bit of a break (104).
It just ticks over quite nicely (103, 104, 106).
Most, indeed, appear fairly comfortable with this level of business and
occupancy, suggesting the validity of Ateljevic and Doorne’s (2000) findings that
low seasons offer a much-needed respite for family businesses.
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