Principles of Revenue Management in Travel and Tourism Industry

TRAVEL & TOURISM
BUSINESS TOOLKIT

Contents
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
P 1 Rationale and principles of the revenue management for the travel and tourism industry...3
P 2 Investigate how a specific sector of travel and tourism industry applies tools of revenue
management to generate and maximize profit.............................................................................4
LO 2.................................................................................................................................................5
P 3 Different stages of HR life cycle and the importance of retaining and developing the talent
in travel and tourism industry......................................................................................................5
P 4 Performance management plan to resolve the behavior that is negative so that issues can
be overcome and staff can be retained.........................................................................................6
LO 3.................................................................................................................................................7
P 5 Specific legislations in travel and tourism industry..............................................................7
P 6 Company employment and contract law has a potential impact on taking decision for the
business........................................................................................................................................9
LO 4.................................................................................................................................................9
P 7 different types of financial statements and reporting mechanism for the companies that are
operating in the tourism industry.................................................................................................9
P 8 Importance and value of budget for controlling the performance of business and
identifying variances..................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
A travel agency is a private retailer or public service that provides travel and tourism-related
services to the general public on behalf of accommodation or travel suppliers. UK ranked fifth
for tourism competitiveness globally. The UK has the fifth most competitive tourism market in
the world, helped by its healthy business environment, strong air travel infrastructure and
cultural attractions. TUI is an Anglo-German multinational travel and tourism company
headquartered in Hannover, Germany. It is the largest leisure, travel and Tourism Company in
the world, and it owns travel agencies, hotels, airlines, cruise ships and retail stores. This report
contains issues such as principles of revenue management. Tools of revenue management and
their application so that profits of the company can be maximized. Life cycle of HR and
retaining and development of employees. Performance management plan with the strategies to
overcome the issues of employee turnover and increase the power of retention. Legislations that
is applicable in the industry of travel and tourism. Company and contract law that impact on
decision making. Different types of financial statements and their ways of reporting mechanism.
Importance and value of budget for controlling the performance of business and identifying
variances (Baumgartner and Bansal, 2019).
LO 1
P 1 Rationale and principles of the revenue management for the travel and tourism industry
There are many methods in which hotels such as TUI manages their revenue.
Market segmentation-
There are two types in which hotel classify their consumers that is qualified and non
qualified. Segmentation of consumers is based on the attribute that is important to guarantee so
that rates can be assessed on the basis of targeted audience and maximum revenue can be
obtained from them (Bolin and et.al., 2018).
Forecasting of demand-
This aspect has a different level of impact on the revenue of the hotel. If the forecast is
done highly wrong then it will lead to controls on inventory on conservative basis. On the other

hand if there is less error in the forecasting then the control on inventory will be aggressive.
Other than this companies such as TUI needs to predict the level of occupancy of rooms in the
near future. It is considered as one of the most difficult predictions. This is done so that rate of
rooms can be controlled. If they want to control it by the time a guest want to spend in the hotel
then they will needs to judge it on the basis of their arrival that is if they walk in and book or it is
pre booked also it is judged on the basis of occasion such as holiday season, festive season.
Supply forecasting-
It is necessary that hotels such as TUI forecasts and predict the duration of stay of guest
so that they can make the room available for other people and mark it open for reservation. This
aspect of forecasting of supply can assess the control of revenue management (Jarratt and et.al.,
2019).
Control on overbooking-
This aspect is concerned is selling more rooms which is more than the rate they can
handle the accommodation. In order to be achieving success of this aspect it can only be possible
if there are a lot of cancellations being made. This aspect has the cope to maximize the revenue
and lower the risk of refused service.
P 2 Investigate how a specific sector of travel and tourism industry applies tools of revenue
management to generate and maximize profit
Marketing with pricing and customer acquisition strategy-
Due to different behavior of booking and sensitivities regarding price on platforms that
operate online. Revenue managers must undertake the activities of marketing in order to enhance
their reach to consumers so that they can maintain the balance between factor of price and
promotion. Revenue management can undertake the strategies of marketing so that their plans of
promotion motivate consumers across the right mix of channels.
Collaboration with sales and marketing-
TUI needs to undertake the holistic approach as it will help them to combine the methods
and strategies that can be used both online and traditionally all of these are concerned with the