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Travel and Tourism Toolkit

University: UK college of Business and Computing

  • Unit No: 4
  • Level: High school
  • Pages: 15 / Words 3701
  • Paper Type: Assignment
  • Course Code: T/616/2009
  • Downloads: 313
Question :

This sample will let you know about:

  • Discuss about the Tools of revenue management.
  • Explain about the five principles of revenue management.
Answer :
Organization Selected : British Airways


Travel and tourism toolkit is helpful for a company who are hugely contributing into the travel industry. Through this tool they can effectively attract wide range of consumers to their company and enhance their profits further.

British Airways is top airway company. They had their networks worldwide. It had its headquarter in London. The above report ends with the definition of revenue and yield management along with various principles and rationale of revenue management in travel industry. Various tools that can be used by revenue management. Impact of the differentiated pricing strategy that could be utilized by airline industry. Report further carried forward with the employees law and contract law which has huge impact on the decision-making of company. This report will examination of the potential implementation of the regulation and employees and ethical principal on the companies decision-making. It will also provide rarefaction on the rules and regulation of the company and their impact on their decision-making. In the last part of this report will analyze the product investment strategy of the British Airways.


Define revenue and yield management


Revenue is income which a business gains from the general business activities, by selling product and services to the consumers. It is also known as turnover or sales. Companies can receive revenue from the interest, royalty or other fees. There are several ways for calculating revenue, that fully depends on accounting method employs.

Yield Management:

It is the variable strategy of pricing which is based on influencing and anticipating behaviour of consumer. The major goal of this is to maximize revenue from time-limited, fixed resources that are room reservations in hotel, seats in airlines or advertising the inventory. Yield management is based on selling to right consumer, at right time for the appropriate pricing. Data driven approach is used for ensuring pricing is to be adjusted for maximizing the results in business (Pimentel, Aizezikali and Baker, 2019). The yield management has narrow focus and is generally concerned with selling price or sales volume through which the best possible yield of revenue could be gained.

Significance and principle of revenue management for tourism and travel industry-

Revenue management is more useful in the travel industry. It can be described below-


Revenue management in tourism render ability for making most out of the perishable inventory of rooms for the hotel, accessing them for maximizing amount of money for generating business (Pavlova, 2017). There is fixed cost in travel industry they need to analyze the actual costing which are being met while providing services to the guests or travellers. This is helpful in further innovation in both development of new product and services and the pricing. Revenue management allows tourism sector to drive down their cost more efficiently. This is also helpful in achieving competitive intelligence and the market awareness. Need example assignments, Talk to our experts! 


There are five principles of revenue management. These can be described below-

  • Value- The value includes perceived value that could be collected by survey and feedbacks. Perceived and advertised value discrepancy must kept minimum at every time through which guest don't get disappointed.
  • Distribution Channels- Distribution channel is also known as marketing channel. Through several distribution channel a British airline can opt various marketing opportunities.
  • Direct Booking- Direct booking let the tourist to book the airlines directly without any mediators. This strategy is helpful in attracting tourist directly to the official website or social media sites.
  • Hotel Software, Insights and Data- The revenue manager of British Airways must make their decision on the basis of recent and accurate data. The airline's software system will also helpful for tool for manager to manage overall functioning and management.
  • Experience that starts with websites- The British Airways must render a blogging section on the website and sharing content on their social media profiles which is helpful for company.
  • Demand forecasting- It is most essential principle of revenue management. The manager must project cost, need and revenue of British Airways (Board and Skrzypacz, 2016). The booking trend could be identified and further that information could be forwarded to marketing department.

Tools of revenue management

There are several tools which could be further utilized by British Airways for further success and growth. Some essential tools are described below-

  • Capital Utilization: The airline capital utilization is measured with the help of local factors and indicating percentage of the total capacity which is used by the airlines. The airline capacity utilization is calculated by dividing revenue passenger miles with the available seat mile.
  • Discount allocation: Allocation of discount means selling airline ticket at low pricing then rack rate. It is so much better to sale airline seats at discount offers to their consumers.
  • Duration control: The duration control is very much necessary for airlines industry. The selling of the tickets are being done on the basis of duration so that it can be effectively managed and controlled. Order assignment help from our experts! 

Impact of various pricing strategy on the revenue management

The airline industry must follow the differentiated pricing in their business. A customer could book their airline seats and this could be views by them as single commodity, further desire is for purchasing seats at the lower price (Kimes, 2017). They had different product as per the classes which are first class, business and economy class for offering value added and catering product across brand utilizing the micro-segmentation of market price and place fences. For example- purchasing of advance ticket, fares for tour operators and frequent redemption in flyer rates etc., Thus this lets them to offer different pricing of each product and allows consumer from different class to book their tickets and enjoying flights. This enhances sale of the airline industry and allows them to book tickets in more quantity. It is very helpful for company to enhance their sale and each & every class of individual to have tickets in the British Airways.

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Critical analysis of principle of the revenue management

The values in revenue management are helpful for British Airways is helpful for them to update their products as per the feedback of consumer and modifying their product accordingly. Whereas sometime feedback and values are not to be appropriate that must be applied to their product. With the help of various distribution channel they can have several marketing opportunities and effectively perform in the marketplace. They can also have more number of suppliers available in marketplace (Kimes, 2016). Direct booking is most useful and utilize by consumer mostly nowadays where tickets can be booked directly and thus it can also reduce sale of ticket due to insecurity of payment to the consumers. Appropriate data and insights are to be utilized by company and if it is not utilized then the overall operation will be affected. Website of British Airways is to be well-established, and they need to have updated it time to time if not then this could have negative impact on consumers. Demand forecasting is to be done by British Airways as they can optimize the cost, revenue and profit and if it is not optimized then they will not analyze the overall costing and profit further.

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Talent Acquisition

Relationship among regulation, legislation and standard 

Regulation is management of complex system as per set trend and rules. It is controlling of the procedure or activity, which is generally through rules. Whereas legislation is law that is promulgated by government body or legislature or procedure of developing it. Before an item of legislation to become a law it is also known as bill or legislation. And it is remained under consideration for distinguishing it from another business. Standard contains technical specification or another précised criteria which is designed for utilizing consistent guideline, rule or definition. The airline industry can itself build internal and external standard for their company.

Equality Act 2020- This legislation allows employees and employers to follow fair treatment and promoting equal environment of working to the employees. This can include that no discrimination is to be done by British Airways to their employees and equal pay is to render to them there is no gender discrimination among employees.

Human Right Act 1998- It is the fundamental right and freedom which everyone in UK is entitled with. Under this act there are various articles all of which had various rights in it. This is commonly known as 'the convention rights' The airline industry must follow this law into the company so that they can have equal treatment to their consumer.

Company, contract and employment law that has impact on decision-making of business

Company law allows the airline industry to legally follow the business process and renders smooth flow of business activities into their companies. This is helpful for aviation companies to take appropriate decisions into the business operation as per the company laws. The contract law allow airline industry to have a specific contract with the company and having the appropriate contract with the other companies so that they can legally have a contract and render services to the consumer effectively (Guillet, 2020). Employment law allows airline industry to render the efficient workforce and implementing a good working environment to the employees legalized with law and thus further they can take appropriate decision-making in business.

Implication of legislation, regulation and standard on decision-making

This all has impacted the decision-making of the airline industry to some extent as the company had to adhere to various legislation and set standard while rendering service to the customer and if they are not following such they can face any legal issues further. It allows the airline industry to work on the set standard so that they can render great quality service to the customers. The company had to take decision as per the several regulation and standard further there decision-making will be done accordingly and thus further render services and business operation as per the requirement of such.

Impact of regulation, legislation and ethical principle

The legislation, regulation and ethical principle had a positive impact on the decision-making of the airline industry and this allows companies to render the effective services to their consumer along with considering ethical principles into the business operations (rotcorne and et.al., 2018). It renders an efficient flow of business operation without any barriers into business and having a great opportunity of growth for a company.

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Type of financial statement 

There are various type of financial statement that can be used by British Airways for analyzing their accounting statement, profit and loss further. Some are explained below-

Balance Sheet

It is the overall review of the organization in which equation of basic accounting has been performed. The gross asset of organization has been shown on the left side of balance sheet whereas shareholder equity and liability has been stated on the right side of the sheet. The British Airways balance sheet shows picture of their liability, assets and shareholder equity at given period of time (Ferreira, Simchi-Levi and Wang, 2018). This statement do not show any outflow and inflow of the overall information of the organization and further explaining whether the company having profit or loss.

Income Statement

Income statement state that what revenue company has gained in the following time. This statement state that cost ad expenses which are beard by airline industry and how much a revenue is being earned by company further. The bottom of this statement show that what is the net earning and loss of company. Through this statement they can analyze the earning per share of company. They can also analyze that what amount is being bared by company's shareholder and what amount is to be allocated to them. It is very essential for British Airways to prepare this statement.

Importance and value of budget

Controlling and value of budget is so much essential for an Airline industry to follow. The airline industry must control the budget so that they can gain huge revenue and profit further.

  • If budget is well communicated it helps each one to understand the priorities of business further and thus the objective of British Airways can be achieved significantly.
  • The procedure of budgeting render opportunities for involving staff, and thus vision of British Airways could be easily shared to everyone and hence the employees can effectively work for the betterment of company.
  • Controlling and implementing budget allows the planners to allocate the money for such resources that can support to the objective of the airline industry. This is hugely helpful in gaining overall aim of the company.
  • The potential investor can easily attract through specific budget controlling.
  • The sales goal can be effectively set by the Airline industry through budgeting.

Financial statements of British airways and Iberia

Profitability ratio

This ratio is generally used by companies to analyses ability of business to generate profit. Profitability ratio is generally used by business to measure the revenue segment (Abrate and Viglia, 2016). Whereas net profit ratio describes the direct and indirect cost of the firm and after that positive return of investment that firm receive.



British Airways

Profitability ratio



Gross profit ratio

(Gross profit/Sales*100)



Gross profit






GP ratio

=3230/24406*100= 13.23%





Net profit ratio

(Net profit/ sales)*100



Net profit






NP ratio

=2480/24406*100= 10.16%


From the above data it is found that Iberia GP ratio is 13.23% and Gross profit ratio of BA is 14.99% that reflects that British Airways is generating more profit as its investment strategies is good and it is able to manage its expenses in significant manner. Net profit ratio of Iberia is 10.16% and BA ratio is 16.05% that also reflects that British Airways is performing well in market and its profitability is higher than Iberia.

Liquidity ratio

This is another kind of ratio which is used to evaluate capacity of company to repay its liabilities. If firm is able to repay it's all debts on time, then it is considered as good position. If firm has great liquidity position in market then it can gain benefit of raise credibility in the market (Feldman and Topaloglu, 2017). Whereas it firms is not able to repay of debts on time then it will affect financial liabilities of business unit to great extent. Current ratio describes that financial strength of business unit, it must be in the form of 2:1. Quick ratio is also known as acid ratio that ensures to eliminate such items which are not in the format of cash, it must be 1:1.



British Airways

Current ratio

(Current assets/ current liabilities)



Current assets



Current liabilities



Current ratio






Quick ratio

(cash+ cash equivalent short term investment +cash receivable’s/current liabilities



Cash+ cash equivalent



Short term investments



Cash receivables



Current liabilities



Quick ratio



From the above table it is found that Iberia’s current ratio is 0.91% and BA current ratio is 0.42% and Quick ratio of Iberia is 0.71% and BA has 0.58% ratio of quick. From the above details it can be said that position of Iberia is good as it is able to manage its debts in significant manner. BA needs to work on its creditability so that it can generate more profit in the market and can raise its credibility.

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Efficiency ratio

This is another kind of ratio that reflects the capacity of company to manage routine affairs. This ratio reflects the ability of business unit to manage or utilize assets of company and manage all the liabilities (Cetin, Demirciftci and Bilgihan, 2016). Account receivables ratio explains that quickness of business unit to gather customer’s bills that shows the efficiency of credit policy of business unit. This ratio clearly describes that how much level of investment must be maintained by organization to manage sales level. Ask for dissertation help london from our experts!



British Airways

Account receivable turnover ratio



Revenue/ average account receivable



average account receivable






Account receivable turnover ration



`From the above table it is found that Iberia’s account receivable turnover ratio is 15.15% and BA ratio is 15.26% there is not much difference between both that reflects that both companies have great credit policy and able to manage sales level effectively. Ask for  from our experts!

Evaluation of business performance

The business performance of the British Airways and Iberia are performing well and having an appropriate credit policy. This is helpful for a company to render an effective product and service to their consumer and competing with their rivals in market effectively. The effective budget of organization helps them to render an effective resourcing through implementation of various plans and strategies. This objective and target of the British Airways and Iberia could be meet effectively. These both companies are performing well in the airline industry and further gaining huge revenue & profit further. The companies are cling well and extraordinary as compare to the other companies in this industry.


From the above study it can be concluded that revenue management and yield management is helpful for company to gain their overall objective further an sustaining in marketplace for long term. This is helpful or company to have an control their business operation in such a way that they can effectively compete with their rivals in market and further they can huge get huge profit as well. the company can easily have smooth flow of business activities through effective budgeting and financial planning. The company can sustain in market for long term and manage their profit and losses further and gain huge success further.

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