Travel Reference
In-Depth Information
Initial demand pattern
Seasonality reduced by
price differentials in
off-season
Supply
Figure 12.3
Reducing seasonality through
price differentials.
J F M A M J J A S O N D
discounted tours, have helped to stimulate demand in the off-season. Increased ef
ciency and
effectiveness of promotional campaigns and better marketing also tend to offset the traditional
seasonal patterns of demand. Yield management techniques used in the airline and lodging
industries are very effective in using price differentials to match supply and demand.
In addition to these strategies implemented by destination areas, some trends in the employment
and leisure patterns of Western societies contribute further to the leveling of demand between off-
seasons and peak seasons. The staggering of holidays, the increasing popularity of three-day weekends
with a holiday on Friday or Monday, and the splitting of vacations between various seasons of the year
all lend themselves to leveling the demand for travel. Once the demand is evened out, the destination
is then able to maximize customer satisfaction during the peak season and during the off-season. Also,
facilities are utilized at a considerably higher level than previously. The importance of boosting off-
season demand and, therefore, the utilization level is further underscored by the fact that in most
tourist service businesses,
fixed costs are quite high in relation to operating costs. This implies that
increasing total yearly revenue, even modestly, produces proportionally larger pro
ts. There may be
some softening of demand during the peak season due to those who might switch to the off-season
because of the lower prices (see Figure 12.3). However, this is believed to be minimal. When off-season
demand is boosted by the multiple-use strategy, peak-season demand is unaffected. Therefore, overall
demand for the entire year will be substantially higher (see Figure 12.4).
Occupancies in off-
season are higher due
to multiple-use
Supply
Figure 12.4
J F M A M J J A S O N D
Reducing seasonality through multiple use.
Search WWH ::
Custom Search