Revenue Management in the Tourism Industry

Revenue Management in the Tourism Industry Introduction Revenue management is an important element in the prediction of consumer behaviour and optimisation of product availability in the market. The concept is also used in setting prices for products through the application of analytics.Advertising We will write a custom essay sample on Revenue Management in the Tourism Industry specifically for you for only $16.05 $11/page Learn More The objective of revenue administration is to maximise the growth of income generated by a firm (Phillips 2011). Another goal involves determining the right time to sell a particular product, the target market, and the ideal price. Through revenue management, organisations can determine the right package to sell to the consumers alongside the product (Legoherel, Poutier Fyall 2013). For this reason, it is said that this concept involves segmented pricing. Analysts in this field focus their attention on two main factors. The two are revenue growth and consumer behaviour . To predict the behavioural patterns of customers, the availability of the product in the market is optimised with a hope of maximising on revenues. Tourism is a multibillion industry in the world. A number of organisations offer a combination of tour related services. Just like any other robust sector of the global economy, the tourism industry is characterised by stiff competition among the players (The Emirates Group 2013). As a result, businesses operating in this segment must make smart choices to maintain or improve on their market share (The Emirates Group 2013). In the tourism industry, yield is the term used to refer to the actual revenue generated by an airliner or a hotel. The term is used in comparison to the income that would have been achieved in the event that the capacity of the operator was optimally utilised at the same published price (Shaw 2011).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In this paper, the author is going to conduct an up-to-date literature review on revenue management in the tourism industry. In the essay, the author will identify the various challenges faced by marketers in this sector today. The impacts of these problems in hospitality and tourism marketing will be reviewed. To achieve this objective, a number of academic journal articles will be used. Revenue Management in the Tourism Industry To understand the concept of revenue management, it is important for organisations in the tourism industry to familiarise themselves with the notion of yield administration. Through improved yields, organisations can effectively grow their revenue (Harewood 2008). In light of this, yield management becomes an important tool for marketers since they can use it to strike a balance between the marketing segments they are dealing with. It is important to establish this equilibrium in order to generate more revenue for the fir m. The focus of the organisation should not be limited to the idea of increasing the number of consumers. Challenges Facing Marketers in the Tourism Industry As stated earlier, most businesses in the tourism sector include hotels and airlines. The author of this paper puts more emphasis on airliners. It is important to understand that most of the organisations operating in the industry are mainly service providers (McKenna 2014). The business firms rarely offer tangible goods to their customers. Goods are only used as incentives. At times, they are included in packages to lure customers. They are often small and branded, such as key holders. The goods do not in any way improve the amount of revenue that is generated by the tourism company.Advertising We will write a custom essay sample on Revenue Management in the Tourism Industry specifically for you for only $16.05 $11/page Learn More They are considered to be part of the variable costs incurred in the pr ocess of doing business. Marketers in this industry have to identify the best combination of segments in order for them to improve the efficiency of their revenue management undertakings. In the process of managing the revenue of their organisations, marketers in the tourism sector face a number of challenges. Different authors adopt varying perspectives with regards to the challenges facing marketers in the tourism industry. One of the greatest obstacles encountered by these professionals is the need to comply with Vision 2050 (Cathay Pacifi ­c Airways Limited 2012). As the aviation industry grew, it became necessary to come up with ways to address issues related to financial sustainability, conservation of environment, safety, and capacity. That is where Vision 2050 came in. To comply with the guidelines provided in this document, the airlines will have to invest heavily in the industry. More revenue will need to be generated to enable the companies implement the set guidelines. For this reason, marketers are required to calculate the best combination of segments. The pricing of the segments should enable the firms to retain and increase the number of customers. At the same time, the companies need to remain profitable. Striking a balance between the two requirements is a challenge to the marketers (Jones, Lee Chon 2011). Players in the tourism industry are also faced with the challenge of cutting on operational costs while at the same time improving the quality of services offered to the customers (AirAsia 2012).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is important to note that airlines, just like any other businesses operating in the contemporary global market, incur both fixed and variable costs. For this reason, the companies have come up with yield management systems. They are required to cut on their variable costs in order to remain profitable. Discounts offered by to the consumers should also be reduced. However, such initiatives only increase the amount of revenue collected per seat. The negative consequence of the move is that the number of customers is likely to go down as a result of the declining quality of services offered. Failure to offer discounts and incentives also makes the airlines lose potential customers, lowering their market share in the process (McCool McCool 2010). Another problem faced by marketers in the tourism industry involves inefficiency in baggage handling (Qantas 2013). Airlines and hotels need to deal with baggage in the most efficient way. However, at the same time, they are expected to red uce their operational costs. Important aspects of baggage handling include arrivals, check-in, manual handling, security, and transfers. Efficiency in this sector translates to improved quality of services. However, additional revenue needs to be allocated to this section to achieve this objective. The cost of such operations is likely to be passed down to the consumers, leading to an increase in the cost of services offered (Schwartz Chen 2012). Businesses in the tourism sector also have to contend with marketing issues related to the environment (Shaw 2011). In aviation, the marketers should take into consideration environmental regulations in their promotional activities. Compliance with these regulations is costly to the airlines. It translates to an increase in the cost of doing business. The airlines will in turn raise the prices charged on the various packages offered to consumers. Increasing the cost of services discourages customers from using the services of the company. On their part, hotels are also required by law to adhere to specific environmental policies. As a result, adjustments have to be made in a bid to comply with the regulations. The prices of some of the packages offered are raised to meet the costs incurred in making these adjustments (Vinod 2009). Change in customer loyalties has also been cited as one of the greatest challenges that marketers in the hospitality and tourism industry have to deal with (Cathay Pacific Airways Limited 2012). Hotels and airlines plan for their capacities in advance. They estimate the number of customers who are expected to use their services within a given duration of time. In most cases, the services are requested by customers and paid for in advance. However, changes in customer loyalties mean that hotels and airlines are likely to operate under capacity. The reduced earnings notwithstanding, the organisations are expected to meet their fixed costs. The low revenue generated as a result of lack of loya lty affects profitability, leading to increased prices in some of the segments. The Impacts of the Challenges on Tourism and Hospitality Marketing The challenges facing marketers in the tourism and hospitality industry have significantly impacted on the competition among segments in the sector. Such segments include accommodation, attraction sites, food and beverage, adventures and recreation, as well as travel trade (Cathay Paci ­fic Airways Limited 2012). Today, investors in the industry are engaged in cut-throat competition in an attempt to gain control of the market share. The operators have come up with improved revenue management systems to enhance their pricing schemes. Competition is important as it improves the quality of services offered to the customers. The costs of operations incurred by the competing businesses are also minimised, which leads to conservation of resources. Through competition, matters to do with convenience, control, and speed when dealing with passen gers have improved. Competition requires businesses to provide unique and quality services in order to retain and attract potential customers (Vinod 2009). Customers are likely to be on the lookout for high quality services, which are characterised by timeliness and consistency. The revenue management strategies put in place are expected to ensure that the most attractive packages are given at the best prices possible. Enhanced revenue management strategies among firms in the tourism and hospitality industry have also led to improved customer experiences (Schwartz, Stewart Backlund 2012). Airlines and hotel companies have devised mechanisms to provide their customers with valuable and vibrant experiences. Through successful marketing strategies, segmentation is made possible, allowing for different classes of tourists to get the best value out of their money. For example, major airlines have specialised on different classes of customers. For instance, for the past few years, Emirat es has focused on offering the best first class flight services in the industry (The Emirates Group 2013). Cathay Pacific Airline, on the other hand, specialises in the provision of services for business class tourists. Qantas and AirAsia focus on economy and low class groups of passengers, respectively. It is also possible for airlines to accommodate the four groups of passengers. Likewise, hotels offer different packages for varying groups of people. As a result, they are in a position to attract a diverse base of clientele. A number of revenue management policies are concerned with baggage handling (Vinod 2009). It is estimated that these strategies will help save over $1.25 billion by the reducing cases of baggage lost and mishandled. The approach is also likely to promote customer loyalty. The airlines and hotels that pay attention to the luggage of their customers are viewed as responsible and attract more clients. Complaints from customers are also reduced. Enhanced revenue m anagement strategies have made it possible for persons to travel from one point to another with ease. The development is brought about by improved price regimes in the industry (Lindenmeier Tscheulin 2008). As a result, many flights are been made to different destinations across the globe. The result of the increased movement of persons is increased congestion in many tourist destinations (Nason 2007). Tourists also pollute the environment around their destinations. Gases produced following the combustion of fuel by the airplanes also cause massive air pollution. It is worth noting that degradation of the destinations will lower the number of visitors. The development will hurt businesses in the sector as a result of reduced number of customers. In light of this, stakeholders should strive to deal with the problem of pollution in order to remain in business. A number of airlines, such as Emirates, have in the past engaged in charitable activities, which include cleaning the environ ment (The Emirates Group 2013). Conclusion Revenue management predicts customer behaviour through analytics. It is used to optimise the prices of goods and their availability in the market in a bid maximise revenue generation. Organisations can determine the most profitable packages through revenue management. In addition, segmented pricing can be implemented using this approach. Competition in the industry is stiff. For this reason, businesses have to come up with appealing packages to remain profitable. Revenue management provides such organisations with a chance to offer high quality services. At the same time, the businesses remain profitable without having to hike the prices of services provided. References AirAsia 2012, AirAsia annual-report, airasia.com/iwov-resources/my/common/pdf/AirAsia/IR/annual-report-2012.pdf. Cathay Pacific Airways Limited 2012, Cathay Pacifi ­c Airways Limited stock code: 00293 annual reports, cathaypacific.com/content/dam/cx/about-us/investor-rel ations/interim-annual-reports/en/2012_annual-report_en.pdf. Harewood, S 2008, ‘Coordinating the tourism supply chain using bid prices’, Journal of Revenue and Pricing Management, vol. 7 no. 3, pp. 266-280. Jones, D, Lee, A Chon, K 2011, ‘Future issues in sales, marketing, and revenue management in greater China: what keeps you up at night?’, Journal of Travel Tourism Marketing, vol. 28 no. 6, pp. 598-614. Legoherel, P, Poutier, E Fyall, A 2013, Revenue management for hospitality and tourism, Goodfellow Publishers Limited, New Jersey. Lindenmeier, J Tscheulin, D 2008, ‘The effects of inventory control and denied boarding on customer satisfaction: the case of capacity-based airline revenue management’, Tourism Management, vol. 29 no. 1, pp. 32-43. McCool, B McCool, A 2010, ‘Incorporating lessons learned into tourism industry strategic planning for disaster management’, International Journal of Revenue Management, vol. 4 no. 3, p . 259. McKenna, R 2014, ‘Revenue management for hospitality tourism’, Journal of Revenue and Pricing Management, vol. 13 no. 1, pp. 74-76. Nason, S 2007, ‘Forecasting the future of airline revenue management’, Journal of Revenue and Pricing Management, vol. 6 no. 1, pp. 64-66. Phillips, R 2011, ‘Efficient frontiers in revenue management’, Journal of Revenue and Pricing Management, vol. 32 no. 1, pp. 229-236. Qantas 2013, Qantas 2012/13 full year financial results, qantas.com.au/infodetail/about/investors/mediaReleaseResults13.pdf. Schwartz, Z Chen, C 2012, ‘Hedonic motivations and the effectiveness of risk perceptions-oriented revenue management policies’, Journal of Hospitality Tourism Research, vol. 36 no. 2, pp. 232-250. Schwartz, Z, Stewart, W Backlund, E 2012, ‘Visitation at capacity-constrained tourism destinations: exploring revenue management at a national park’, Tourism Management, vol. 33 no. 3, pp. 500- 508. Shaw, S 2011, Airline marketing and management, 7th edn, SSA Ltd., Oxfordshire. The Emirates Group 2013, The Emirates Group complete financial report and accounts 2012-2013, theemiratesgroup.com/english/facts-figures/annual-report.aspx. Vinod, B 2009, ‘The complexities and challenges of the airline fare management process and alignment with revenue management’, Journal of Revenue and Pricing Management, vol. 9 no. 2, pp. 137-151

Valens and the Battle of Adrianople (Hadrianopolis)

Valens and the Battle of Adrianople (Hadrianopolis) Bad intelligence gathering and the unwarranted confidence of Emperor Valens (A.D. c. 328 - A.D. 378) led to the worst Roman defeat since Hannibals victory at the Battle of Cannae. On August 9, A.D. 378, Valens was killed and his army lost to an army of Goths led by Fritigern, whom Valens had given permission only two years earlier to settle in Roman territory. Division of Rome In 364, a year after the death of Julian, the apostate emperor, Valens was made co-emperor with his brother Valentinian. They chose to split the territory, with Valentinian taking the West and Valens the East- a division that was to continue. (Three years later Valentinian conferred the rank of co-Augustus on his young son Gratian who would take over as emperor in the West in 375 when his father died with his infant half-brother, Gratian, co-emperor, but only in name.) Valentinian had had a successful military career prior to being elected emperor, but Valens, who had only joined the military in the 360s, had not. Valens Tries to Reclaim Land Lost to the Persians Since his predecessor had lost eastern territory to the Persians (5 provinces on the eastern side of the Tigris, various forts and the cities of Nisibis, Singara and Castra Maurorum), Valens set out to reclaim it, but revolts within the Eastern Empire kept him from completing his plans. One of the revolts was caused by the usurper Procopius, a relative of the last of the line of Constantine, Julian. Because of a claimed relationship with the family of the still popular Constantine, Procopius persuaded many of Valens troops to defect, but in 366, Valens defeated Procopius and sent his head to his brother Valentinian. Valens Makes a Treaty With the Goths The Tervingi Goths led by their king Athanaric had planned to attack Valens territory, but when they learned of Procopius plans, they became his allies, instead. Following his defeat of Procopius, Valens intended to attack the Goths, but was prevented, first by their flight, and then by a spring flood the next year. However, Valens persisted and defeated the Tervingi (and the Greuthungi, both Goths) in 369. They concluded a treaty quickly which allowed Valens to set to work on the still missing eastern (Persian) territory. Trouble From the Goths and Huns Unfortunately, troubles throughout the empire diverted his attention. In 374 he had deployed troops to the west and was faced with a military manpower shortage. In 375 the Huns pushed the Goths out of their homelands. The Greuthungi and Tervingi Goths appealed to Valens for a place to live. Valens, seeing this as an opportunity to increase his military, agreed to admit into Thrace those Goths who were led by their chieftain Fritigern, but not the other groups of Goths, including those led by Athanaric, who had conspired against him before. Those who were excluded followed Fritigern, anyway. Imperial troops, under the leadership of Lupicinus and Maximus, managed the immigration, but badly- and with corruption. Jordanes explains how the Roman officials took advantage of the Goths. Soon famine and want came upon them, as often happens to a people not yet well settled in a country. Their princes and the leaders who ruled them in place of kings, that is Fritigern, Alatheus and Safrac, began to lament the plight of their army and begged Lupicinus and Maximus, the Roman commanders, to open a market. But to what will not the cursed lust for gold compel men to assent? The generals, swayed by avarice, sold them at a high price not only the flesh of sheep and oxen, but even the carcasses of dogs and unclean animals, so that a slave would be bartered for a loaf of bread or ten pounds of meat.- Jordanes Driven to revolt, the Goths defeated the Roman military units in Thrace in 377. In May 378, Valens aborted his eastern mission in order to deal with the uprising of Goths (aided by Huns and Alans). Their number, Valens was assured, was no more than 10,000. [W]hen the barbarians ... arrived within fifteen miles from the station of Nike, ... the emperor, with wanton impetuosity, resolved on attacking them instantly, because those who had been sent forward to reconnoiter- what led to such a mistake is unknown- affirmed that their entire body did not exceed ten thousand men.- Ammianus Marcellinus,  The Battle of Hadrianopolis Occupation Index - Ruler By August 9, 378, Valens was outside of one of the cities named for the Roman emperor Hadrian, Adrianople. There Valens pitched his camp, built palisades and waited for Emperor Gratian (who had been fighting the Germanic Alamanni)  to arrive with the Gallic army. Meanwhile, ambassadors from the Gothic leader Fritigern arrived asking for a truce, but Valens didnt trust them, and so he sent them back. The historian Ammianus Marcellinus, the source of the only detailed version of the battle, says some Roman princes advised Valens not to wait for Gratian, because if Gratian fought Valens would have to share the glory of victory. So on that August day Valens, thinking his troops more than equal to the reported troop numbers of the Goths, led the Roman imperial army into battle. Roman and Gothic soldiers met each other in a crowded, confused, and very bloody line of battle.   Our left wing had advanced actually up to the wagons, with the intent to push on still further if they were properly supported; but they were deserted by the rest of the cavalry, and so pressed upon by the superior numbers of the enemy, that they were overwhelmed and beaten down.... And by this time such clouds of dust arose that it was scarcely possible to see the sky, which resounded with horrible cries; and in consequence, the darts, which were bearing death on every side, reached their mark, and fell with deadly effect, because no one could see them beforehand so as to guard against them.-  Ammianus Marcellinus: The Battle of Hadrianopolis Amid the fighting, an additional contingent of Gothic troops arrived, far outnumbering the distressed Roman troops. Gothic victory was assured. Death of Valens Two-thirds of the Eastern army were killed, according to Ammianus, putting an end to 16 divisions. Valens was among the casualties. While, like most of the details of the battle, the details of Valens demise are not known with any certainty, it is thought that Valens was either killed towards the end of the battle or wounded, escaped to a nearby farm, and there was burned to death by Gothic marauders. A supposed survivor brought the story to the Romans. So momentous and disastrous was the Battle of Adrianople that Ammianus Marcellinus called it the beginning of evils for the Roman empire then and thereafter. It is worth noting that this catastrophic Roman defeat occurred in the Eastern Empire. Despite this fact, and the fact that among the precipitating factors for the fall of Rome, barbarian invasions must rank very high, the fall of Rome, barely a century later, in A.D. 476, did not occur within the Eastern Empire. The next emperor in the East was Theodosius I who conducted clean up operations for 3 years before concluding a peace treaty with the Goths. See Accession of Theodosius the Great. Source: De Imperatoribus Romanis Valens(campus.northpark.edu/history/WebChron/Mediterranean/Adrianople.html) Map of the Battle of Adrianople (www.romanempire.net/collapse/valens.html) Valens