Thomas Cook: Revenue Management, HR Life Cycle, and Legal Compliance

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UNIT 4 TRAVEL AND TOURISM
BUSINESS TOOLKIT
THOMAS COOK
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INTRODUCTION
This assignment shows the different features of the travel and tourism management which is
sales, revenue management and budget management, legislation and ethical activities in travel
and tourism business as well as the human resource management and strategic action
regarding human resource in tourism and travel business sector.
This assignment throws light on these aspects of tourism management. All these aspects are
important within the business as the revenue management shows the report of various financial
activities such as consider price with respect to demand and supply. The legislation and ethical
activities ensure travel business sector provides better service quality to the customer and work
for their benefits. And lastly, the human resource is the key part of the travel and tourism
business industries.
Thomas cook is the British based travel and tourism business body which provides various
travel and holiday packages to their customers. With respect to their size of the business
Thomas cook well suited to understand the various aspects of the assignment as Thomas cook
is one of the popular names in travel and tourism business sectors all around the world.
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LO1
P1 DISCUSS THE RATIONALE AND PRINCIPLES OF REVENUE MANAGEMENT
FOR THE THOMAS COOK
Revenue management and its Principles
Revenue management is the process in which consumer’s behavior can be predicted for
disciplined analysis. This application is conducted at the micro-market level which optimizes the
availability of product and price for maximizing the growth of revenue (Baum et al., 2014).
Effective revenue management helps business to reduce the cost of their services which
generates more income. Thomas Cook significantly helped by effective revenue management
as it helps business to increase sales as well as effectively optimize human resource in a
situational condition where demand and supply affect the operations of the business industry.
Revenue management is first applied to Airline industry as it is an effective technique for the
business industry and later applied in worldwide for hotels etc. it is generally referred as a direct
business for generating maximum revenue from available resources. The plan is organized with
respect to an available resource of assets (Boella and Goss-Turner, 2013). The revenue
management concept significantly helped Thomas Cook to effectively analyze the lead of the
customers. As stated the principles of revenue management is first used in airline industries
such as Thomas Cook. Revenue management aims to provide better customer service by
giving priorities to their preferences which can be done by variable techniques that predict the
demand-based pricing.
The revenue management is the process which identifies the correct product through a suitable
channel. This can be referred to as customer found themselves at the right time in which the
time and price is perfect for them to satisfy their needs. The concept of revenue management
includes inventory, channel, the pricing concept and considerable amount of marketing (Cooper,
2016). Pricing considers as the base of revenue management as the various types of products
and services that totally depend on it. The question should also keep in mind that shows the
situation in which products keep changing according to the demand of the consumers to live in
the hotel. The inventory concept of the revenue management refers to the activity in which the
best rooms and accommodation is providing to the customers to satisfy their needs. On the
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other hand, effective marketing can increase the sales of the business through various
advertisement techniques which helps business to grow (Cross, 2011).
The channels of distribution maintain the rates of the services provided to consumers in case of
price sensitivity as well as sell-out the channel by distributing the rates and prices of the rooms.
This process helps Thomas Cook in providing better services and loyal measure as well as
managing the activities related to their customers.
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P2 INVESTIGATE HOW A SPECIFIC SECTOR OF THE TRAVEL AND TOURISM
INDUSTRY APPLIES REVENUE MANAGEMENT TOOLS TO GENERATE AND
MAXIMISE PROFIT
The airline business sector of tourism and travel such as Thomas Cook is keenly involved in the
activity in which business understands the tool and techniques of revenue management to
maximize the profit for business industry (De Grosbois, 2012). The hurdles that are keep
coming for the business industry is pedaled with respect to demand of the main routes that can
be resolved throughput restriction in purchase activity and control the capacity of fares. In order
to analyze the instability that attached to the time value limits the revenue management is taken
a step further ahead. The concept of different price is adopted by the business to enhance the
level of top load pricing and freight carriers along with the services.
The yield system of management can also significantly help with respect to finding the
differences in the price to the consumers and the sensitivity of price by the application of fences
rate. This helps business in setting the new level in which profitability is increased. The revenue
flows and optimization of revenue, total revenue management, revenue integrity can help to
increase the profitability through the synergistic method (Draper et al., 2011).
The hotel industry can be totally reliant on the non-linear assessing and autocratic level of
competition in which the perception of values are made by the unique and different situation to
dictate cost. This can significantly useful in understanding the unusual profit which ultimately
maximizes the return on seasonal phases. Optimization of profit and optimization of revenue is
the suitable and composite approach to tackle the condition of the segmented buyers in context
to flexible terms of trade. This can help the behavior of the customer in which they willing to
purchase at the right price (Higgins, 2012). Hence, the profit-losing out in context to potential
demand builds.
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M1 ANALYZE THE IMPACT OF DIFFERENTIATED PRICING STRATEGIES ON
REVENUE MANAGEMENT IN A SPECIFIC SECTOR OF THE TRAVEL AND
TOURISM INDUSTRY
Pricing is the main element for the business activity as it is linked with all the party which
included in the business activity. Pricing refers to the key factor for differentiation of products
and services. Thomas Cook provides their different services for different prices such as the
different price for a business class seat in flight, different price for economic class, etc. also the
different price for foreign holiday package compare to domestic package, etc. Pricing strategies
also help in maintain the valuable services in the business as consumers have to pay a high
price for the luxury services (McKelvey and Longley, 2015). Various types of pricing strategies
in context to revenue management:
Premium Pricing
Premium pricing refers to as the price charged for their unique products or services which are
hard to found in the market as well as very rare in nature. In premium pricing strategy the cost of
the products of the business industry is generally high compared to its rival companies.
Premium pricing generates a good amount of revenue for the business industries and beneficial
in revenue management (Monjardino et al., 2015).
Pricing for Market Penetration
This pricing strategy is used by the new business organization to establish them in the market.
In this strategy, pricing is generally less compare to its rival to make the mark in the market as
well as draw the attention of the customers. Revenue management plays a huge role in this
strategy as it is very necessary to forecast the pricing activity for the newly established business
(Ng and Yip, 2011).
Economy Pricing
This strategy considers as the safe strategy in which business industry offers the products and
services at affordable price in which a fixed amount of profit percentage is charged from the
customers (Paladino, 2011). This price strategy aims to maximize sales activity by reducing its
price.
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Skimming Pricing
This strategy aims to maximize the profit at the starting or for newly introduced products in the
market. This strategy works really well for the new type of products introduced in the market. In
this strategy business charge a high cost for the products and service which is introduced by the
business industry until their competitors come with the same type of products (Boxall and
Purcell, 2011). The revenue management aims to maximize profit at the initial stage and later
on works to maintain a good financial state for the business organization.
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LO2
P3 REVIEW THE DIFFERENT STAGES OF THE HR LIFE CYCLE APPLIED TO A
SPECIFIC TRAVEL AND TOURISM JOB ROLE AND THEIR IMPORTANCE FOR
RETAINING AND DEVELOPMENT TALENT
There are many stages of the HR life cycle and each one has its own value and significance as
well as each one is unique in the life of tourism manager. The HR life cycle can make directly
impact on the growth of the Thomas cook as HR is the main component of the tourism and
travel business industries such as Thomas cook (Bratton and Gold, 2017). The Stages of the
HR life cycle helps to improve the skills of the employees as well as develop them as a whole
this ultimately help the Thomas cook as efficient and skilled employees’ helps business
organization to achieve its goals and objectives, as well as the stages of the HR cycle, helps to
motivate employees and also helps in to retain human resource for the successful growth of the
business industry. The different stages of the HR life cycle are:
Recruitment (Attract Me)
The first stage of every HR activity of any business organization regardless of its nature is the
Recruitment process. Recruitment is the process in which the HR manager takes crucial steps
to seek and find suitable persons for suitable job roles through various offer which attracts
candidates. The HR manager of Thomas cook gives special attention to the abilities of the
candidates as the HR manager things business will grow effectively if the right person gets the
right tasks to do within the business industry also, the task assigned according to the skills of
the employees bring effectiveness in their work. Effective recruitment of the candidates helps
Thomas cook in its growth as well as help business to gain competitive benefits (Felstiner,
2011).
Education (Get me started)
This phase of the HR life cycle aims to provide enough training once the candidate assigns to
their duties and responsibilities. The moment when the employee work for their new job role in
that very moment the education phase starts for the employee. Thomas cook gives professional
training to their newly appointed employees to meet the expectations of the business industry
(Flin and Patey, 2011). This phase solely based on the HR manager as they determine the
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effective design or process to provide the required education. The existing staff provides
support to know the things about the Thomas cook and ensures that everything is fine from both
ends.
Figure 1: HR Life Cycle & its stages
Source: Flin and Patey, 2011
Enlargement (Development)
One of the major reasons for staff turnover is lack of motivation, not enough moral boosts
provided to the employees. Once the employee enters the business organization it is important
to motivate them from time to time. Effective motivation help in employee development as
motivation brings best out of the employees which increase the efficiency of employees
(Geppert et al., 2016). Thomas cook’s HR manager use effective strategies and methods of
motivation to encourage their employees. Also, motivation provides various opportunities for
both to develop and grow according to the situation.
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Evaluation (Manage Performance)
This phase of lifecycle measures the performance of the employees. It is very necessary for HR
managers to measure the performance of the employees as it gives the idea to see how
effective employees work for their respected tasks. In case employee not met with the certain
requirement for the task, they can provide more training to continue the work in the desired way
and finish the work in time (Greenland and Irwin, 2014). Performance can be measured through
employee's effective work, client's feedback, etc.
Celebration (Recognition)
Thomas cook gives the extra bonus and rewards to the employees for meeting the expectations
of the clients as well as for their better work. For achieving the business goals of Thomas cook
the industry provides attractive gifts to the employees. Recognition serves as a motivation
among the employees. It is wise to recognize the efforts of the employees (Griffin, 2012).
Transition (Farewell)
After a certain period of time and provides enough service to the business industry employee
intend to switch company for a better opportunity. This is the last phase and ultimate phase of
the Employee life cycle. For that business industry like Thomas cook needs to fulfill the needs of
the employee in order to retain them. For example: in order to retain Finance manager of
Thomas Cook, the business industry needs to appreciate their work as well as if they serve
business long enough give them boost through promotions, etc. It is necessary to retain
employees and control staff turnover (Buhalis and Darcy, 2010).
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