This sample will let you know about:
- Discuss about the Tools of revenue management.
- Explain about the five principles of revenue management.
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.
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 Britis