Revenue Management in Travel and Tourism Industry

Travel and
Tourism
Business

INTRODUCTION
Travel and tourism sector is a very vast industry which includes different
business activities in order to provide effective services to customers (Anderson and
et.al., 2017). There are many companies which are dealing in travel and tourism
industries. For attracting larger number of customers as well as meeting the their needs
and requirement it is very important that company is providing high quality services to
customers. This will be very helpful in gaining competitive advantage over other rival
companies. There are different rules and legislation that are necessary for organisation
to follow in order to smooth functioning of business and its activities. Chosen company
for this report is British Airways. This is a well known British airline company which is
providing its products and services to different part of the world. This is considered as
the one of the leading company in airline sector. British Airline organisation was
founded in March 31 of 1974 and headquarter of this company is established in
Waterside, UK. This report will includes key principles as well as rationales for
managing revenues for travel and tourism industry. Different revenue management tool
has been evaluated. Various stages of HR life cycle has been identified for travel and
tourism sector as well as performance management plan is developed for resolving
negative behaviour and issues of staff retention.
MAIN BODY
TASK 1
P1.
Revenue management can be define as a way in which company needs to
manage its revenues in order to gain more and more profits. It is essential for British
Airways company to manage its revenues in order to gain competitive advantage over
other rival companies. Revenue management will help in predicting need and demand
of customers for optimize inventory as well as prices (Bolin and et.al., 2018). This is
very important in overall growth and development of organisation as well as earning
more profits for organisation. Yield management can be describe as a strategies though
which respective company will be able to sell its products and services to right set of
customers. This refers to the management system with the use of information
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technology application. This is majorly related to development of pricing strategies for
earning desired resulted.
There are several rational for revenue management which are mentioned below.
 By managing revenues of organisation in effective and efficient manner
respective company will be able to develop better and new products and services
to organisation.
 This is very supportive in development of better relationship among the other
managers of organisation with the revenue manager.
 This will lead to minimizing the cost of organisation as well as help in reducing
time that was required in pricing tactics.
There are three key principles which are related to revenue management of
travel and tourism industry (Chang, Backman and Chih Huang, 2014). These principles
are pricing, demand forecasting and market segmentation. All of these key principles
are mention below in detail.
Pricing – This is one of the essential part of organisation as it play crucial role in
attracting more and more customers. Respective company needs to analyse as well as
evaluate need and want of organisation. This will help in developing better pricing
strategies so that company will be able to set price which is able to full fill customers
requirement.
Demand forecasting – British airways organisation needs to forecast of demand
of its products and services in market area. This will help in analysing the actual
position of respective company as compare to other rival companies. It is essential for
an organisation to increase demand of its product and services for enchaining its sales.
Market segmentation – Segmentation refers to the way in which company can
divide its market area into different parts. This will help company to identify as well as
analyse most appropriate and potential customers (De, Lacy and et.al., 2014). Market
segmentation will lead to targeting the right and accurate customers. By market
segmentation respective company will be able to develop better strategies which will
help in gaining strong position in travel and tourism market. This will be very helpful for
British airways company improve its sales and profits.
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