The head of Silversea in Australia has urged competitors in the luxury sector to stop slashing prices or risk damaging the integrity of the product.
Karen Christensen, general manager and director of sales and marketing, said the level of discounting is some of the heaviest she has seen – and it could rebound on the sector.
She told Travel Today that while competitive rates are beneficial for attracting new clients, “something has to give” if fares go too low.
“Prices in the luxury market generally are some of the lowest you will ever see. They are certainly the lowest I have seen since I have been with Silversea and they are not sustainable,” she said.
“But I’d say to everyone in this segment that pricing integrity is paramount. You can only take your fares so far. If you go too far something has to give and at Silversea we are very conscious of that. You can do promotions and that’s all fine as long as the product doesn’t suffer.”
Silversea has steered away from deep discounts and remained focused on value, Christensen said. But competitors – she declined to reveal their identities – have gone down the discount path, she claimed.
“There are some who have taken their fares low and it’s a long way back,” she said. “We have not taken it so low that we can’t recover from it.’
The extra tonnage in the sector has put downward pressure on fares and “there is a responsibility to fill ships”, she added.
“But we all have a responsibility in the luxury market to be careful about our pricing,” Christensen continued. “There have been price challenges in 2012 and special fares have come out but we’ve tried to avoid doing that as much as possible because it’s not really the way luxury product is presented.”
Prices on some Silversea voyages are around 10% less than hoped, she added.
