Rational and Principles of Revenue Management in Travel and Tourism Industry

This document discusses the rational and principles of revenue management in the travel and tourism industry. It also reviews the different stages of the HR life cycle and applies it to specific travel and tourism roles. The document provides insights into the legislation, financial statements, and reporting mechanisms for the industry.

TRAVEL AND TOURISM
BUISNESS TOOLKIT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO 1.................................................................................................................................................1
P1 Discussion on rational and principle of revenue management for the travel and tourism
industry...................................................................................................................................1
P2 Investigation on the specific sector of the travel and tourism that applies to revenue
management tools to maximise profit....................................................................................3
LO 2 ................................................................................................................................................4
P3 Review the different stages of HR life cycle and applied it to specific travel and tourism
role..........................................................................................................................................4
P4 Develop performance management plan for specific travel and tourism job role and apply
techniques to resolve negative behaviour. .............................................................................5
LO 3 ................................................................................................................................................6
P5 Define the legislation for the travel and tourism industry.................................................6
P6 Explain how company employment and contract law has potential impact on business
decision making......................................................................................................................7
LO 4.................................................................................................................................................7
P7 Description on different type of financial statement and reporting mechanism for
enterprise................................................................................................................................7
P8 Define the significance and value of budgets for controlling business performance. ......8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Travel and Tourism plays vital role in economic development of the country. Henceforth,
tourist spends more on hotels, restaurants, sightseeing, museums and local stores (Craddock,
2018). Tourism can be of several types such as domestic tourist, inbound tourism etc. Tourism
termed out as subset of different products and services that are offered to people.
The present study is based on business activities of British Airways, this is flag carrier
airline of United Kingdom that headquartered in waterside. It is the second largest airline within
the United Kingdom.
Furthermore, study will focus on activities as the key principles of revenue management
for the travel and tourism, this report also aids to manage the budgets and aids to maintain
statistical and financial records. Moreover, assignment will assess about managing the human
resource life cycle within context of HR strategy.
LO 1
P1 Discussion on rational and principle of revenue management for the travel and tourism
industry.
Travel and tourism industry plays the crucial role and it is impacting the economic
development of the country. There are certain characterstics about that industry which make
crucoal and exciting for companies to undertake planning a marketing and social media strategy.
These are defined in following context as are-
 Perishability- It is defined as one of the most crucial characterstics of tourism industry.
Hence, hotel rooms and cable car seats rooms cannot be consumered for future sales.
Uncertaining in the demand of customer is impacting this industry in huge context.
 Inconsistency- Commodities of the tourism industry is always different. Thus, rational
commodities attributes likr price, additional services and nights of stay can all only be
compred to minor changes.
 Investment and immobility-The hotel and orher commodities is usually a big lockup in
the assets.
Principle of revenue management-
Revenue management -
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It is known as method of collecting and analyzing financial data that helps to predicting
the consumer behaviour that optimize the service offering and price to maximise the revenue
growth. Additionally, the main goal is to selling the right product to the right consumer at the
right time. This results that organisation is able to accomplish its financial growth and aims and
goals of the firm can be accomplished in appropriate manner (Gibson and O’Rawe, 2018). It is
termed out as the application that helps to predict the consumer behaviour at the micro market
levels. This is generally characterized as tool that helps to anticipate the demand and pricing of
the enterprise to achieve the best possible financial results. It is defined as the critical part of the
enterprise that helps to accurately and efficiently realising the profitability and productivity of
the enterprise.
Yield management – This is defined as price strategy that is commonly utilised in businesses
in hospitality, airline and travel related fields. In addition to it, the main object of Yield
management needs to use the data based tactics and plan of action in terms to enhance the
revenue. In addition to it, British airways activities mainly based on several rates, strategies and
margin to sale their commodities within the market. Additionally, British airways mainly put
consideration on basis of customer and market through that needs and demand in the effective
mode.
Principle and rational of revenue management-
It is defined as one of the effective tool for planing action and is applied by hotel
management to increase profits. This is defined as one of significant tool that by industry that
assist to earn more profitability for business. In BA the revenue model needs to implement by the
management that defined in the following manner as are-
Reduction in cost- Booking trend and components of ticket is mostly dependent on number of
aspect that mainly relat with age, weather conditions and this also defines the economy of nation.
Hence, it can be one of the way for the British airway for revenue management. This is easy for
the enterprise to sale their commodities at the best rate. In addition to it, it is also assistive in
terms to reduction in the cost of the service by utilising all the resource in exact mode (Camilleri,
2018).
Attracting guest- There are number of organisations that are providing the services at the large
scale. It is crucial for the travel and tourist firms to fulfil the maximum seats and this also assist
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to book the rooms and flights. It is defined as one of the effective strategy that aids to build the
policies and thus support to enhance the customer satisfaction level.
Marketing and branding- There are number of the existing workforce that are performing the
business activities at the global level. It is crucial to increase the profitability by utilising the
number many ways of marketing and branding. In addition to it, the one of the main motive is to
execute the branding that can aids to enhance the income and cost ( Del Vecchio, Secundo and
Passiante, 2018). It can be used to manage the business and profit between all the units of the
enterprise.
Principles of revenue management- To enhance the profitability for the enterprise as well as to
enhance the performance of enterprise. It is crucial for authorities that helps to develop various
principles in effective manner. Thus, principles defined in following manner as are-
 Demand for service- The one of the main aim of this is to predict how much demand will
be in market. this is done by gathering data and info. This is effective for BA to develop
proper pattern to deliver services that is required by customers.
 Overbooking- It is defined as principles of sale of services and commodities is high than
the volume for the enterprise. In addition, it leads to boost the profitability by booking
more tickets that is useful in reducing management risk of the enterprise (Sears and
Weatherbee, 2019).
 Market segmentation- There are number of the customers and markets for the enterprise
that is segregated into various areas. It is one of the effective that helps to determines the
taste and needs of all customers. In addition to it, this is one of the positive components
for the BA to categorize the market as per the requirements of the customer.
 Demand forecast and displacement analysis- It forecast the demand that is easy for the
enterprise to enhance the profitability for the enterprise. The accurate analysis can be
conducted for BA to fulfil the sudden demand.
P2 Investigation on the specific sector of the travel and tourism that applies to revenue
management tools to maximise profit.
Revenue management is termed out as application of disciplined analytics that predicts
the consumer behaviour at the micro market levels and this helps to optimize the commodities
3

availability (Gaurav, Sahu and Mathew, 2018). Henceforth, the primary aim of revenue
management is to sell the right commodity to right consumer at right time. In addition to it,
revenue management tools are defined in the following manner as are-
Revenue management tools as are-
 Discount allocation- Loyal and regular customer can be defined as one of the major
perspective that highly enhance the organisation profitability. It is one of the effective
term for the enterprise that generates high that increase the sale of commodities and
services for quoted enterprise. This is one of the effective term that retain the loyal
customer of BA.
 Duration control and late booking strategies- The techniques as automated booking
markup strategy will enhance the booking and profits for the travel and tourism industry.
In addition to it, travel and tourism is defined as the growing industry with large
contribution yo economy of the country.
 Fulfilling space- It is the tool that is mainly uses for the minimum resources and this also
helps to generate maximum profitability and productivity (Danvila-del-Valle and Zegarra
Saldaña, 2018). This is one of the effective term that results the consumer that provide
the effective services so that organisation profitability can be enhanced and things can be
utilised in proper manner. In this, there are number of the British airways that fixed to
generate the minimum profitability for the entity on the constant basis.
For example- British airways needs to undertake the inditiatives that can be helpful in terms to
enhance the revenue within the enterprise. In present scenerio, the most of the aviation industry
is using discount allocation system as this helps to attract loyal and regular customers.
Implement of revenue management
 Forecast of demand and supply- Demand of the customer in airline sector influence the
working of the industry in huge aspect in term to earn high profits. In this context, this
can be stated that it is crucial to manage the demand and supply for the commodities. It is
the situation that can be cope with the facilities of effective management.
 Market segmentation- It is crucial to target the market on the basis of the all the
component as consumer, competitors and pricing policies of the market ( Ikhlayel, 2018).
In addition to it, the outcomes for the enterprise will help in targeting people.
4

For example- British airways needs to segment the market as per analysing the needs and wants
of customer's. It can be one of the significant tool that helps the organisation to perform the task
effectively and efficiently.
LO 2
P3 Review the different stages of HR life cycle and applied it to specific travel and tourism role.
The Human resource life-cycle is defined as concept in which human resource manager
of the enterprise mainly defines the stages of the employee time with particular firm. Therefore,
these are defined in the following manner as are-
Recruiting and on-boarding- It is termed out as process of hiring a new employee. The one of
the main role of human resource department stage is to assist within planning. It is inclusive of
the job ads, selection of candidates and to conduct the interviews of employees. HR of British
airways needs to take the initiatives to hire the suitable employees to perform the organisation
performance so that productivity and profitability can get enhanced. Therefore, this can be stated
that on-boarding is defined as the process to getting successful applicant that set up in system as
a new employee.
Education- It is defined as the process in which employee should aware what is his or her job
role that are must be followed and full-fill by the organisation to accomplish the organisation
objectives for the short term intervals. In terms to context if retaining talent within the talent
education also plays the one of the effective role within the multi national organisation. With
help of communicating the essential information to organisation culture. It is crucial to educate
the employees of the enterprise so that each things can be done effectively.
Career development- This defied as career development opportunity that can be helpful to keep
the employee engaged with the firm over time. It is the responsibility of the Human resource
manager to enhance professional growth of employees with help of providing training
opportunities so that employee can have responsible position. It can be one of the effective steps
that can aids to encourage an individuals.
Motivation- Employee turnover termed out as the major issues that needs to be faced by the
enterprise due to performance and productivity of management get decrease. It is the
responsibility of the leader to put their major focus on generating and creating positive bond with
the interns and employees. By motivating the employees the whole activities within the
enterprise can be conducted in well effective and efficient manner.
5

Termination and transition- The role of the Human resource professional is to manage the
transition with help of ensuring the policies and procedure that are needed to be followed. Thus,
exit interview needs to be taken so that enterprise can identify the lacking areas that needs to be
improved to maintain the productivity within entity. All of these stages needs to be handled
internally as this can provide effective services in terms to manage the employee life cycle.
Importance of retaining and developing talent within British Airways-
This is significant to retain the employees within the enterprise as this helps to enhance
the sustainability of the enterpruse. This can b one of the effectove way that can enhance the
brand recognition of organisation. Thus, it is the responsibility of the enterprise to provide the
training and developing opportunities to staff of the enterprise so that they perform their business
activities in effective and efficient manner. It is term that aids to bring out the best.
P4 Develop performance management plan for specific travel and tourism job role and apply
techniques to resolve negative behaviour.
Performance management plan termed out as the corporate management tools and this is
defined as ongoing process that aids to monitor and evaluate the employees work. It is termed
out as the continue process that helps to set the effective communication between the supervisor
and employees. This is one of the effective tool that aids to manage the coordination between
employees and resources. In addition to it, performance development plan needs to ensure about
the goals and objectives that are needs to be achieved within deadline
Plan for specific job role and performance management plan-
Travel agent- The main activities that needs to be performed by the travel and tourist industry is
by travel agent. This is also defined as term that must be in use to enhance the experience and
knowledge of employees. Henceforth, the role that needs to be performed by them are as
booking of flight, hotel selection and holiday activities.
Thus, performance management plan for the role of travel agent defined as-
 Objectives and goals- The one of the main object of British airways is to enhance the area
of work as per the requirement of the organisation. It is one of the effective way that
defines the responsibility of travel agent to enhance the sale of the tickets. It provides the
whole management the right direction for employees to undertake the enterprise activities
effectively and efficiently.
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 Proper consultation with expert- The quoted enterprise is performing their activities at the
global level. Henceforth, authorities of British airways needs to consult with experts for
making the accurate decision. It can be one of the effective way to undertake the accurate
decision. Thus, one of the main responsibility of travel agent is to deal with the key
experts about the local areas.
 Create effective action plan- By creating an effective action plan for management aids to
complete the work within the minimum period of time. Thus, quoted entity has divided
the whole task in small manner. By delegating the right job to right perform can aids to
undertake the business activities in well and effective manner.
Performance management action to deal with negative behaviour-
This is term that needs to be require by the enterprise to accomplish the objectives and
goals. It is crucial for employee to completing and performing the role as per the market
conditions. Henceforth, travel agents can enhance the sales of their service with help of
formulating effective strategy for enterprise.
Performance managhment plan- The Travle coordinator is fainn wide range of issues and this
impacts the workinh of the enterprise in the huge context. Henceforth, this is crucial to improve
the skilsl and capabilityies of the values of Travel coordinator as as-:
Improvement
measures
Success criteria Additional
support required
Review schedule Outcome of
objective
Communication
skill
It can be improve
with proper
inclusion of some
modification and
to enhance the
knowledge.
By use of online
and online and
offline courses.
By analysing the
communication
with customers.
This will be
helpful to attend
the level of
customer
satisfaction as
proper interaction
aids to cope up
with doubts.
Customer service
skill
This could be
improved by
looking over the
By practice active
listening and by
learn to use
By undertaking
feedback from
customers.
It will be helpful
to enhance the
brand recognition
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issues of
customers and to
provide proper
assistance in
handling their
working.
positive language. in market as well
aids to increase
market share.
LO 3
P5 Define the legislation for the travel and tourism industry.
The legal judicial system helps to regulates the business functions in effective and
efficient manner. The legal authorities of the UK has always recognised the significance of
tourism and also introduced the new policies over the years ( Sears and Weatherbee, 2019).
Henceforth, the rules, laws and regulation are the major standards that needs to be followed by
enterprise to perform the activities effectively. Thus, policies and rules must be framed out to
ensure the interest of local organisation. Effective rules and regulation needs to be framed out the
airline sector so that better customer assistance services can be developed and maintained. The
most of the rules are framed out in terms to benefits to organisation as well as customer. Thus,
law are as-
 Activation act 1982 has mainly formulated to protect the interest of public individuals
within the airline industry. The act paves the way for the Civil Aviation Authority (CAA)
to motivate airports to deliver better facilities, provide more information for passengers
and give greater incentives for airports to prepare for disruptive events such as severe
weather.
 Aircraft insurance regulation 2004 It sets up minimum requirement for air carrier and
companies in respect of customers, cargo, etc. However, airline has to provide evidence.
the requirements are passenger – 250,00 SDR, cargo- 19 SDR per KG and third party.
here, carriers can also be insured for at least 100,000 SDR per passenger.
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P6 Explain how company employment and contract law has potential impact on business
decision making.
Employment and contract law defined the terms and condition for the employees to
undertake the better course of action (Del Vecchio, Secundo and Passiante, 2018). In addition to
it, contract law is an agreement of employees and employees at workplace. These contracts needs
to be in the written form so that both will not face the conflicts in the future. In addition to this,
some rules are needs to be executed within contract in following manner as-
 Contract act 1990- It is act that is considered by all organizations. Henceforth, it is
necessary for enterprise to proceed as per the agreement. This also assist the
management to bring improvement in the goodwill in the market. In addition to this,
British Airways will provide customers at the airport and onboard a delayed aircraft with
timely.
 Minimum wage act 1998- All the workers within the enterprise must be paid the
minimum amount (Camilleri, 2018). If enterprise do not adhere this act then legal action
can be taken. Thus, all employyes to the chosen entity must be given minimum wage rate
to employee so that effective and streamlined working can be conducted.
 Equality act- Bristish airways needs to be ensure that they must provide equal
opportunities to the individuals and provide the fair chances of performing the business
activities effectively and efficiently. They must promote all workers the effective
working conditions so that all can feel encouraged and promote effective working.
Henceforth, this can be stated that the regulations, standards and legislation are mainly
based on the culture, system and structure of the enterprise that is not need to be impacted by the
decision of the management. British airways needs to properly followed the rules and regulation
to bring improvement and enhance their brand recognition within market and society.
LO 4
P7 Description on different type of financial statement and reporting mechanism for enterprise.
Travel agent of the enterprise needs to performed the varied number of responsibilities
that can be assigned and managed by the enterprise as to sale the more tickets, to manage the
accommodation of clients and many more. In term to deal with it, effective plans must be made
to forecast ad monitor the essential aspect of the enterprise that are related with the financial
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management. Henceforth, some of the effective ways must be performed by enterprise in
following manner as are-
Types of various financial system-
Financial statement termed out as the picture of the enterprise that represents the
performance of work in the market. It can be framed out with proper planning, budgeting and
also helps to forecasting the business activities effectively. Therefore, these are defined in
following manner as are-
Balance sheet- It is termed out as the statement that shows up the financial position within the
market. This aids to have detailed statement by showing the balance of the enterprise (Gibson
and O’Rawe, 2018). In addition to it, balance sheet needs to be formed at the end of financial
year and this shows the existing financial position. Additionally, this undertakes and liabilities.
Income statement- It is one of the crucial part that define the financial performance of the
enterprise. This timely records the expenses and income of the enterprise and also record the
sales of enterprise. Henceforth, the income statement total the debit and credit to determine the
net income before taxes.
Cash flow statement- It is defined as statement that provides the aggregate data in relation to
all inflows and outflows that receives by the company (Craddock, 2018). In addition to it, cash
flow defined as term that used to describe the cash amount that is generated and consumer
within given time period. Therefore,statement of cash flows reports the sources and uses of cash
with help of operating activities, investing activities, financing activities, and certain
supplemental information for the period specified in the heading of the statement.
P8 Define the significance and value of budgets for controlling business performance.
Budget of the enterprise work as to undertake the estimation of the revenue and expenses
that can be earned by the enterprise for specific time period. This is termed out as pre plan
activity that helps to spend the money in relation to complete the organisation operations
efficiently. Thus, the value for the budget can be defined in following manner as are-
 Budget helps to have reduction in the unnecessary expenses for the enterprise.
 The budget estimation is helpful for BA to identify emergency funds.
 Budget report aids to determine the money of inflow and outflow of cash.
The budget evaluation process termed out as to undertake the evaluation that helps to
evaluate the unforeseen circumstances that led to look over unforeseen outcomes and this also
10

allows to understand financial variables of the enterprise. Creation of the budget aids to
anticipate the cash shortfalls and this also helps to plan for major expenditure. Budget aids to
define the conditions of the business within the market. Managing resources of business can be
hard to maintain the whole resources significantly.
CONCLUSION
From the above aforementioned report it can be stated that Travel and tourism industry
plays the crucial role in bringing development within the country. Henceforth, travel and tourism
industry is one of the most competitive in the world. It deals with hotels, airlines, travel agents,
tour operators and car rental services are the various marketing methods that bring development
within the country.
The present report is based on business activities British airways, this is the United
Kingdom the largest airline service.
Furthermore, assignment has covered the activities as key principles of revenue
management for the travel and tourism, this report also has covered the budgets and that aids to
maintain statistical and financial records. Moreover, assignment has focused on to assess about
managing the human resource life cycle within context of HR strategy.
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REFERENCES
Books and Journals
Camilleri, M.A., 2018. Nurturing travel and tourism enterprises for economic growth and
competitiveness. Tourism and Hospitality Research. 18(1). pp.123-127.
Craddock, G., 2018, October. Tools to Upgrade Facilities for All: How to Improve Business
Dealing with Tourism. In Transforming our World Through Design, Diversity and
Education: Proceedings of Universal Design and Higher Education in Transformation
Congress 2018 (Vol. 256, p. 265). IOS Press.
Danvila-del-Valle, I. and Zegarra Saldaña, P.E., 2018. How innovation climate drives
management styles in each stage of the organization lifecycle: The human dimension at
recruitment process. Management Decision. 56(6). pp.1198-1216.
Del Vecchio, P., Secundo, G. and Passiante, G., 2018. Analyzing big data through the lens of
customer knowledge management: evidence from a set of regional tourism
experiences. Kybernetes. 47(7). pp.1348-1362.
Gaurav, K., Sahu, K.C. and Mathew, S., 2018. Factors Influencing Customer Satisfaction at
Tours and Travel Agencies in India. International Journal of Research in Management,
Economic and Commerce. 8(3). pp.31-38.
Gibson, A. and O’Rawe, M., 2018. Virtual reality as a travel promotional tool: Insights from a
consumer travel fair. In Augmented reality and virtual reality (pp. 93-107). Springer,
Cham.
Ikhlayel, M., 2018. Development of management systems for sustainable municipal solid waste
in developing countries: A systematic life cycle thinking approach. Journal of cleaner
production..180. pp.571-586.
Sears, D. and Weatherbee, T.G., 2019. Wine Tourism and Regional Economic Development: Of
Mimesis and Business Models. In Wine Tourism Destination Management and
Marketing (pp. 515-536). Palgrave Macmillan, Cham.
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