Revenue Management Strategies in Tourism
Revenue Managers and Surfers: A Comparison
In revenue management, the goal is to identify the best opportunity to maximize profit within a specific market segment. We can draw a parallel between a Revenue Manager and a surfer. The key difference is that a surfer can’t control the wave (fluctuations in sales), they must adapt to it. A skilled Revenue Manager, however, can influence these fluctuations.
If sales decrease (the wave diminishes), prices should be lowered. Conversely, if sales surge excessively (the wave is too high), prices should also be adjusted to avoid overselling and potentially remove the offering from distribution channels. Both the surfer and the Revenue Manager analyze the ‘waves’ to determine the optimal course of action.
Analyzing a New Process
This graphic helps determine the viability of a new process. We must ask ourselves:
- Is it interesting?
- Is it possible?
- Has it been done before?
This concept relates to customization (creating different versions of a service). For example, tailoring the service based on the client’s travel companions (family, partner, friends).
It also connects with syndication. For instance, a new process might involve improving a website to integrate various services.
The Relationship Between Groups and Pro-Am
The Pro-Am model involves leveraging amateur enthusiasts (non-experts) to help increase revenue through group creation. This association creates a win-win-win situation. For example, if a person proposes a trip through a travel agency and others express interest in the same trip, everyone benefits. The customer enjoys their chosen trip, the group benefits from an organized experience, and the enterprise attracts more clients, leading to increased revenue.
Connecting Proximity/Geolocation and HR
Consider a scenario where you’re hiring and identify a potential candidate through online activity (e.g., Bitcoin forums, social media). Geolocation reveals they are staying at your hotel. Human Resources could then instruct the receptionist to offer the candidate a job upon their arrival. Another example is recommending a nearby sushi restaurant to a client known to enjoy sushi.
Connecting ‘Versions of Me’ and HR/Marketing
Marketing strategies should differ based on the customer’s travel group. Marketing to a group of friends will focus on parties and nightlife, while marketing to a family will emphasize family-friendly activities. Personalizing the service is crucial for customer satisfaction. ‘Versions of Me’ refers to the same individual having different preferences depending on the context.
The objective is to deliver what customers want at the optimal moment to retain them and fulfill their needs (this could be part of a loyalty program).
Long Tail: Addressing Multiple Segments with Pro-Am
The Long Tail concept implies catering to numerous market segments. The challenge is to serve all segments effectively. Since it’s impossible to be an expert in every segment, leveraging the Pro-Am model (amateur enthusiasts) is key. These individuals understand their own needs and desires, and they seek a win-win situation. For example, they might propose a specific holiday package, creating a customized segment and attracting more people with similar interests.