TransTasman Bubble supply versus demand imbalance, says Virtuoso

"Hyper-demand" for luxury travel experiences means consumers will need to book now

Days out from the launch of the quarantine-free TransTasman Travel Bubble between Australia and New Zealand comes a forewarning from Virtuoso’s regional chief regarding inventory and meeting client expectations.

The two-way bubble commences next Monday, 19 April 2021. Already Air New Zealand has reported bumper bookings on key routes across the ditch, with the airline’s CEO Greg Foran reporting “really strong bookings for Australians coming to check out New Zealand” particularly around the ski season.

Michael Londregan, SVP Global Operations for Virtuoso acknowledges that the TransTasman Bubble is “hugely encouraging and a great opportunity” for Australian travellers, but at the same time says “a few things are out of sync” while noting that not all businesses will be in recovery at the same speed.

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As the travel industry continues to forge a path out of the COVID crisis, Londregan told LATTE he believes consumers will have the perception that the bubble will result in a buyer’s market.

“Consumers will be contacting their travel agent to book a great holiday, thinking they’ll get exactly what they want, when they want, and how they want it,” Londregan said, using a buffet as an analogy. 

“They’ll be thinking, Hey, no one’s at the buffet and it’s a beautiful buffet. I’m going to rock up with my plate and have the pick of it.

“The cold, hard reality is it is a beautiful buffet, but it’s 3:30 and the buffet shuts at 4. All the king prawns are gone. The seven oysters left no one wanted, but there’s lots of rocket salad and bread rolls, ‘cause no one wants those,” he quipped.

Bay of Islands, Northland, New Zealand | Credit: Alistair Guthrie/Tourism New Zealand

Buyers market conundrum

He said for travel advisors it is vital to create urgency and explain to clients they need to consult with a professional in an appropriate timeframe if they expect to secure the experience they want.

“That’s the biggest challenge now. The challenge is the borders are going to open and we need consumers to understand that buying in this ‘recovery market’ is probably different than what they think it’s going to be.”

“You can’t wait. There’s limited inventory in our luxury sector in Australia and New Zealand. Limited inventory is highly sought after by the millions of Aussies and Kiwis that usually purchase their luxury experiences in other parts of the world.”

“There’s hyper-demand for luxury experiences, and you better go and sit down with your adviser and tell them what you’re looking to do, and you better be prepared to commit, because it’s not actually going to be a ‘buyers market’. It’ll be a seller’s market which I don’t think any of them can get their head around.”

“All of the talk about how much the industry has struggled has made consumers really feel like when I come back with my wallet it’s going to be a buyers market – I’ll get whatever I want, whenever I want, and at a deal. And I just don’t think it’s going to be like that,” Londregan explained.

Roys Peak, Wanaka | Credit: Miles Holden/Tourism New Zealand

“Travel agents are going have to work really hard to satisfy their customers because of inventory problems and they’re going to have to work really hard at getting the consumer’s head in the game.”

Londregan dismissed potential price gouging by Kiwi suppliers, telling LATTE most travel companies will still be crying out for international business. 

Australian travellers will also need to realise that a lot of lodge products in New Zealand have only been operating to the domestic market, and open for business on Thursday, Friday and Saturday nights.

“Suppliers will need to gear up. They’ve got to get themselves back fully operational,” he added.

“At the moment I think there will be a supply versus demand imbalance. All the demand was forced away from us due to government policy. Now the demand channels [are] open it takes a little bit of time for the supply cycle to get in sync.” 

Consumers will need to understand that if they are thinking about a ski holiday in Queenstown in August, they “have to get in and see someone right now to book”.

Glacier Southern Lakes Helicopters | Credit: Tourism New Zealand

New Virtuoso Kiwi partners

In preparation for the TransTasman Bubble, Virtuoso has been canvasing the New Zealand market for new partners for nearly 12 months.

Londregan said Virtuoso was keen to align with Tourism New Zealand in a similar manner to its association with Tourism Australia during the pandemic. The parties have already agreed in principle to work together.

“We’ve been actively working with Tourism New Zealand on what we’re going to do,” Londregan revealed to LATTE, adding that the luxury travel network had been “doing our homework and getting prepared”.

“Virtuoso has put together a much more robust domestic portfolio of partners in Australia already and we’ll be doing that for New Zealand. We’ll be doing the same when Bubbles open up to the Pacific Islands and when they open up to parts of Asia.”

“Anytime the government creates a bubble we’ll be working on partnerships within those”.

Lead image: Canterbury Plains, Canterbury, New Zealand | Credit: David Wall/Tourism New Zealand

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