Package holiday industry´s profit optimization model
Latva, Pasi (2014)
Latva, Pasi
HAAGA-HELIA ammattikorkeakoulu
2014
All rights reserved
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2014060612028
https://urn.fi/URN:NBN:fi:amk-2014060612028
Tiivistelmä
Revenue management is a crucial part of modern airline and hotel businesses. This
thinking has also been adopted in the package holiday industry during the past decade.
There are very few studies made around the subject from the package holiday industry
´s point of view. This work explains the basic concepts of revenue management philosophy
in the airline and hotel industry and adapts best and most suitable practices
from these branches into the package holiday industry. Most often revenue management
covers only the controlling of the available capacity and pricing it accordingly.
The aim of this work is to introduce a wider concept of profit optimization. In this
broader approach the CRM philosophy is combined with the revenue management
thinking. This new way of thinking is called Multi Dimensional Profit Optimization
model, later called as MDPO model. The MDPO model enables the tour operator to
maximize the long term customer value and profits. MDPO combines the marketing
actions, CRM actions together with traditional revenue management in a way that all of
these components contribute to one another. The revenue management forecasts are
used for marketing action planning, while the CRM gives the tour operator the boundaries
in which the yielding actions can take place without damaging the customer loyalty.
This work describes the basic principles used in the MDPO modes and if companies
should choose to adapt these practices, they would need to modify the MDPO to
fit into their workflows and also define the framework in which the MDPO would
work.
Key
thinking has also been adopted in the package holiday industry during the past decade.
There are very few studies made around the subject from the package holiday industry
´s point of view. This work explains the basic concepts of revenue management philosophy
in the airline and hotel industry and adapts best and most suitable practices
from these branches into the package holiday industry. Most often revenue management
covers only the controlling of the available capacity and pricing it accordingly.
The aim of this work is to introduce a wider concept of profit optimization. In this
broader approach the CRM philosophy is combined with the revenue management
thinking. This new way of thinking is called Multi Dimensional Profit Optimization
model, later called as MDPO model. The MDPO model enables the tour operator to
maximize the long term customer value and profits. MDPO combines the marketing
actions, CRM actions together with traditional revenue management in a way that all of
these components contribute to one another. The revenue management forecasts are
used for marketing action planning, while the CRM gives the tour operator the boundaries
in which the yielding actions can take place without damaging the customer loyalty.
This work describes the basic principles used in the MDPO modes and if companies
should choose to adapt these practices, they would need to modify the MDPO to
fit into their workflows and also define the framework in which the MDPO would
work.
Key