Key Principles of Revenue Management for Travel and Tourism Industry

Travel and Tourism
Business Toolkit

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1 (Sales budget and revenue management)..........................................................................1
LO 1.................................................................................................................................................1
Explain the key principles of revenue management for the travel and tourism industry.......1
LO 4.................................................................................................................................................3
To manage budget and maintain statistical and financial records..........................................3
PART 2 (HR life cycle and HR strategy)........................................................................................6
LO 2.................................................................................................................................................6
To manage HR life cycle with respect of HR strategies........................................................6
PART 3 (Legislation and ethics)......................................................................................................8
LO 3.................................................................................................................................................8
Potential impact of legal and ethical consideration on travel and tourism businesses...........8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Tourism industry is more significant as it provides many benefits and helps in increasing
the demand as well as growth of more industries. As it is not only limited to the economic
contribution as it also creates employment and development. It includes several facilities such as
accommodation, transportation as well as drinking services which works according to the visitors
or customers requirements. The main aim of hospitality industry is to satisfy the needs of
individual's who travelling from one place to another place. British Airways is taken for this
report which is the flag carrier airline of UK that headquartered at waterside. Under this report
study about the mainly three concepts i.e. sales budget, revenue management, HR life cycle,
strategies as well as ethics and legislations. In sales budget and revenue management discuss the
principles, budgets as well as maintain statistics records. In HR, discuss about the ways of
managing life cycle as strategies. Lastly, focus on the legislation and ethics and its impacts on
industry.
PART 1 (Sales budget and revenue management)
LO 1
Explain the key principles of revenue management for the travel and tourism industry.
Revenue management: It is considered as an application of analytics information in a
detailed or disciplined way which helps in forecasting the behaviour of consumers at a small
level and optimise resources appropriately to accomplish the revenue growth (Baumgartner,
2019). Within the context of British Airways, revenue management helps in performing daily
operations in an effective way as well as it allows the owner of company to predict future
opportunities and demands. This will lead in the effective accomplishment of goals as well as
better financial performance.
Rationale revenue management:
It is considered as a most important tool which is in used by the tourism industry in order
to earn high revenue for their businesses. Within the context of BA, the management of company
implements revenue administration that are discussed as follows: Cost reduction: The bookings of travel agency or tickets are totally depends on the
several factors that involves the age of travellers, seasonal like holidays, weather
circumstances as well as economy of country. It is essential for British Airways to

formulate appropriate strategies for the effective management of company's revenue
which helps in selling products and services at a best price by minimising the entire cost
(Kwok, 2013).
 Attracting guest: Most of the companies of hospitality sector provides their services at a
large area so it is essential for the British Airways to increase the bookings of hotels and
flights. The company needs to formulate effective strategies so that the satisfaction of
customers is raised. This will assist in offering better quality of services to their
customers.
Principles of revenue management:
These are the essential part of an business organisation as all needs to develop
appropriate principles in order to increase their performance by enhancing revenue for the
company as well as industry. Within the context of British Airways, some of the effective and
essential principles are discussed as follows: Overbooking: It is related to the selling of goods and services is higher than the volume
of businesses. Within the context of BA, it is only possible while seats are cancelled by
the users or clients the company get a chance to earn revenue. In addition, this principle
helps in increasing the profit of company by booking more tickets that is advantageous in
order to minimise the management risks (Beirman, 2018).
 Market segmentation: As businesses has diversified into many kinds of market segments
and has different customers. All these has varied taste and preferences which are in
accordance of their own values and behaviour. So it is a positive symbol for the BA in
order to divide whole market accordance of their similar requirements of clients.
Tool for revenue management:
Several tools and techniques are available that can be used by British Airways in order to
manage their revenue in an effective as well as efficient manner. Some of these are discussed
below: Allocation of discounts: Customers loyalty as well as potential customers are major
aspects for an organisation which helps in increasing the company's sales as well as
revenue. As it enhance the sales and revenue of BA by generating management leads
which gives profitable results. The company adopts discount policy as a effective tool
that helps in retaining more customers (BRASS Education Committee, 2019).