Travel Reference
In-Depth Information
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Costs - travel and tourism organisations must know
FOCUS ON INDUSTRY
the full costs of providing their products if they are
to arrive at prices that give them a realistic profi t. If
costs go up, prices may have to follow;
Examining British seaside resorts and the products
they offer is a good example of how the product life
cycle works in practice. Resorts such as Brighton,
Scarborough, Llandudno, Torquay and Bournemouth
became popular in Victorian times, due mainly to the
introduction of the railways and more leisure time.
Their popularity continued into the 20th century up
to the Second World War, linked to increasing car
ownership and longer holidays with pay. From the
1950s onwards, visitors to British seaside resorts
began to decline, tempted away by the growth in
overseas package holidays. From the 1990s onwards,
many resorts began investing in their tourism sector to
halt this decline, by building new facilities, upgrading
accommodation and adding new attractions for
visitors. So you can see that British resorts have
gone through each of the stages of the product life
cycle, with the more forward-looking towns investing
money to rejuvenate their tourism products.
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Seasonality - prices change in response to demand
and it is common to charge different amounts for the
same product at different times of the year and even
different times of the day. An all-inclusive French
camping holiday for a family of four with Eurocamp,
for example, can cost nearly £500 more in August
than the same package in late September. Similarly,
the admission charge to a theme park may well
be higher at weekends than weekdays, refl ecting
different levels of demand;
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Competitor activity - in the highly competitive travel
and tourism sector, an organisation must be aware
of what its competitors are charging and adjust its
own prices accordingly;
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The state of the economy - in times of recession,
products may be reduced in price in order to
generate revenue, e.g. prices for hotel rooms may
be heavily discounted on the assumption that it is
better to get a little income for the rooms rather
than nothing at all if they are left empty;
Activity 5.5
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Objectives of the organisation - clearly a private
sector company will need to maximise revenue
and will try to set prices that help achieve this
objective. Not-for-profi t organisations in the public
and voluntary sectors may be able to offer more
concessionary prices to achieve their social aims.
Working with a colleague, plot where you think each
of the following products and services lies on the
product life cycle - family holidays to Ibiza, low-cost
airlines, farm guesthouses in the UK, mountain-biking
holidays, coach tours in Britain, weekend breaks to
Riga (Latvia) and skiing holidays in Scotland. Share
your fi ndings with the rest of your group, explaining
and justifying your reasons.
Activity 5.6
This activity is designed to provide evidence for P3.
Carry out some research into prices at different times
of year for package holidays to Benidorm with three
different tour operators. Find prices for peak season,
shoulder season and low season. Base your research on
a family of four (children aged 4 and 6 years), travelling
from Birmingham and staying full-board. Show your
fi ndings as a bar chart, highlighting the variations
in price at different times of the year. Calculate
percentage price differences for each tour operator
and explain the reasons for the variations in price.
Price
The pricing of products and services is a crucial aspect
of the marketing mix in travel and tourism. Price is just as
important as product, place or promotion - if the price is
wrong, not amount of advertising or other promotional
work will make the customer buy the product. In the
dynamic world of travel and tourism, prices change
constantly based on many factors, including:
This activity is designed to provide evidence for P3.
