Travel Reference
In-Depth Information
to admit groups or families. There are several benefi ts arising from this pricing technique: even
though the purchaser may make more than the minimum number of visits, thus apparently
reducing potential revenue from each additional visit, the presence of extra visitors on site is
more attractive to potential visitors, there is the potential to obtain additional revenue from
hospitality and shop sales, and season ticket holders can be contacted for feedback on the
operation of the attraction and for cross-selling and loyalty purposes, making them a considerable
asset to the attraction. Using discounted prices for this purpose should be part of the attraction's
overall pricing strategy. For a study of revenue management practices in theme parks, see Heo
and Lee (2009). Lennon (2004) showed in an early study of UK attractions that pricing was a
neglected area of management practice in the sector. In the case of Heritage attractions, Leask,
Fyall and Garrod (2002) comment on the diffi culty of price setting where the offering changes
during the year and includes special exhibitions too.
Event pricing is particularly diffi cult because in the case of a unique event it often appears
impossible to estimate attendance numbers in advance. However, the usual considerations apply:
costs must be covered and an allowance made for profi t, assuming profi t is anticipated. Many
organizations plan events as part of their operations which are not intended to make a profi t but
for other strategic purposes, such as publicity, staff bonding, creating public awareness and so on,
but price must still be a consideration if losses are to be avoided.
In the case of mega-events and major festivals, setting prices for the component events or for
the component aspects such as accommodation, transport and ancillary services is a complex and
challenging part of the planning, and will depend on the overall strategic perspective of the
organizing group. The decision whether to keep aspects of the pricing transparent or to use
bundling to offset potential losses in any one part of the operation is fundamental to the pricing
strategy. It must be remembered that customer experience and awareness of the cost inputs can
create resistance to price opacity, so when dealing with an experienced and sophisticated
consumer base there is less scope for padding prices.
And fi nally
Price setting is easier to do when you know your market and what it will bear. Knowing what
your costs are or at least what they have been and are likely to be in the future will enable you
to arrive at a pricing strategy which will maximize your revenues and thereby your profi ts. The
more you know the more effective your pricing strategy will be.
However, as discussed above, the most important infl uences on tourism pricing strategies are
different for each sector. There is a clear trend towards reducing operating costs, in the package
and accommodation sectors as well as for LCCs. While LCCs still promote their offerings on the
basis of much lower prices than traditional full service carriers, their infl uence on the industry
has also been to offer new destinations and greater convenience to customers, and the research
opportunities for the future will lie in a better understanding of the relationships between
motivation, price and satisfaction.
References
Aguiló, E. and Rosselló, J. (2012)
Research Note:
'The new all-inclusive board formula in mature
destinations - from motivation to satisfaction',
Tourism Economics
,
18(5): 1117-23.
Aguiló, E.J. Alegre and Sard, M. (2003) 'Examining the market structure of the German and UK tour
operating industries through an analysis of package holiday prices',
Tourism Economics
,
9(3) 255-78.
Anton, S., Fernandez-Young, A., Cortes Jimenez, I. and Saladie, O. (2010) 'Destination management and
new tourism mobilities' presented to the Government of Catalunya, 31 October.
