Search results

Increasing operational costs and narrowing profit margins are forcing many Hong Kong travel agencies out of business. Studies have demonstrated the strategic importance of revenue management (RM) implementation for travel agencies that wish to remain competitive. Hong Kong travel agencies should learn from these examples and modify their existing practices. As travel agencies have many of the characteristics of traditional and non-traditional RM industries, they should be able to adopt the RM operational strategies that have been successful in other industries. This study’s methodology is qualitative; in-depth interviews are conducted with 10 industrial professionals. The results provide valuable insights into RM implementation in Hong Kong travel agencies. The implementation strategies discussed here include the use of perishable inventories, predictable demand, segmentation, reservations made in advance, limited capacity and appropriate cost and pricing structures, all of which aid in profit optimisation. The results indicate that RM can improve travel agencies’ competitive stance and enhance profit maximisation. RM practitioners need to fully understand the concept and techniques and have the determination to develop and promote the system among personnel at every level of the travel agency.

Social studies of price-setting are generally focused on the production of prices in the markets. This chapter is about the different types of prices and the exploitation of one price type for commercial purposes. The twofold nature of prices (technical and rhetorical), consolidated here in a recommendation algorithm, is defined, through an ethnographic case study of start-up company in France, from 2014 to 2015. The price is thus considered as a good in itself, which not only has to be produced but sold (and not always by honest means), opening the way to an anthropological critique of the “reality of prices.”

In this chapter, inventory and sales data from a small business with seven showrooms are evaluated to forecast future sales and maximize total profits. In each showroom, three major brands of ceiling fans are sold and a limited amount of products from each brand are displayed. Each showroom varies in their sales volume, display capacity, and profit margins. Using historical data, the optimal display configuration was determined for each showroom; that is, the proportion of products from each brand to display in the limited display grid, while acknowledging existing constraints. Next using the optimal displays, profit for the next year is forecasted. Finally a comparison is made between actual and forecasted results and profits pre and post the optimal product display.

Unlike manufacturing firms where the production of goods can be adjusted according to the demand of customers, hospitality firms do not have the ability to alter the capacity of the changing demand of guests in a short period of time. Given the relatively fixed capacity or supply, maximizing revenue through inventory control is essential for hospitality operations. This chapter covers operations inventory control extracted from the field of revenue management. First, the concept of capacity management and planning is enclosed and various capacity management tactics and inventory control strategies are explored. Next, the management and principles of space inventory through inventory-based restrictions, strategic pricing, displacement analysis, and distribution channel management are addressed. Finally, the respective applications of these principles, strategies, and tactics in several hospitality sectors are discussed.

Digitalization and marketing technologies have made it possible to overcome some barriers to pricing – a multidisciplinary field between marketing, finance and IT – and have set the stage for a paradigm shift in the pricing profession. Value creation, the pricing process, and price communication have been transformed by innovative business models and advanced algorithmic and human–machine solutions. This chapter synthesizes the literature to date and provides a comprehensive framework for an all-encompassing 360° pricing approach that broadens the understanding of pricing in the context of digital business across all steps of the price management process. Starting from product attributes and motivational beliefs in consumers' value assessment and adoption of (technological or digital) products or services, new business models and pricing models emerge in the digital economy, human–machine solutions for price implementation and repricing are increasingly applied, and price search and communication take place through a variety of digital communication channels. Each stage of this framework discusses concrete examples, highlighting the freemium strategy, the subscription model, price tracking and repricing tools, and digital price information channels such as e-commerce, marketplace, or price comparison platforms. The implications for price management in a digital, technology-driven landscape are discussed from the executive level to the analyst level.

Choosing the right pricing strategy is a complex decision, even though it is fundamental for transport companies whose activities are very diverse and subject to strong stochastic fluctuations. However, in spite of its complexity, adequate pricing can be a very relevant instrument to ensure the competitive position of the company.

European airlines are competing for the same passengers, often with different strategies and, as a consequence, with different financial results at the end of the fiscal year. The use of different pricing strategies is one of the potential explanations. This brings us to the research question of this chapter: How can air pricing strategies be used to support strategic aims, and what are the consequences?

This chapter first deals with the state of the art in air pricing strategies, followed by an analysis of the relationship between airline pricing, yields and profit. The focus then moves to a case study at Brussels Airport over the period 2012–2017. Following the entry of Vueling and Ryanair at Brussels Airport, the incumbent Brussels Airlines launched a very aggressive pricing war against the two newcomers. The result was a partial withdrawal by Vueling and Easyjet and an end to Ryanair’s expansion at Brussels Airport. Even without access to confidential detailed data, one can learn a lot from the reconstruction of the consecutive management decisions by the airlines involved.

Growth strategies exist, specifically for business divisions with a poor competitive position, by “orchestrating” value chains in external networks. The theory of competence development provides a basis for successfully developing new value architectures, since massive changes in a business division can take place only if they are based on durable competences. Four steps to orchestrating value chains can be deduced: (1) identifying changes in the value architecture as a possible growth strategy, (2) creating the organizational prerequisites for the deconstruction of value chains, (3) selling nonspecific value-added and (4) building networks around the core business that link (nonspecific) noncore activities to the firm.