By EyeforTravel.com Correspondent in Amsterdam<br><br>TUI UK and Thomas Cook shared their viewpoint with EyeforTravel.co
Published: 24 Nov 2005
By EyeforTravel.com Correspondent in Amsterdam
TUI UK and Thomas Cook shared their viewpoint with EyeforTravel.com's Ritesh Gupta on how yield management is evolving and the challenges in optimising it. Excerpts:
Peter Jarvis, head of revenue management systems, TUI UK:
What kind of changes have you witnessed from yield management perspective?
I think the environment is certainly becoming complex and therefore we need smarter systems for yield management. There are new competitors coming in, comprising online players and low-cost airlines. It's not just big tour operators. In this context, I think improving the yield management system is critical now. With market becoming complex, its important for yield management systems to keep up.
How have these changes thrown new challenges? How have you coped up with them?
I think from operations perspective staff is critical. You can have great systems but you still need human beings to run them. Its about retaining good people and analysts. Its equally important to understand what we are trying to achieve rather than just pure mathematics.
It is fundamentally scientific in terms of how fast we can fill up occupancy, working on rates etc. But you got to be aware what you are trying to do, optimising your business, putting them in brochures, discounted pricing and spot pricing. Its all about sound strategy as well. Its not only a mere mathematics puzzle as business needs to be optimised.
What factors do you think are critical in today's environment to optimise yield management?
I think its important to know the value of business you are trying to manage. Pricing is complex, one needs to know the cost of sourcing a product and pricing.if you don't how profitable is your business is, then it will be tough to manage it. Recently we have gone live with our forecasting. Managing the complex business today manually is really tough. We are starting to change but still a lot of work is being done manually. With automation, we would like to have majority of the programmed being automated and keep the human intervention as and when required in order to make it more efficient.
Kay Ryan, head of yield management, and Dean Jones, head of yield support, Thomas Cook:
What kind of changes have you witnessed from yield management perspective?
The optimisation of profit has become more complex as the traditional durations, destinations and lead in times have changed coupled with the increased competition from on-line distributors. The ability to understand unconstrained demand better by channel is now more important than ever as tour operators compete more and more in the dynamic packaging area.
How have these changes thrown new challenges? How have you coped up with them?
Increasingly the cost of obtaining business is now a major factor as is establishing the natural demand of a route, resort and price segment. Accordingly the recruitment and retention of skilled and experienced staff has now become more essential than ever. However, yield within a Tour operating environment is still not quite as well recognised as the arenas of car hire and airlines which are perceived as far sexier!
The Thomas Cook Yield Department has recognised this and has a Competency Based Development Programme for all new team members along with a Central Tour Operations Training Academy, which had Yield as a core module within the programme.
What factors do you think are critical in today's environment to optimise yield management?
A stable political and economic environment would be a good start, although perhaps wishful thinking!
On a serious note the ability to 'truly' understand what factors are driving demand, or indeed lack of, and the ability to re-act quickly to a fast moving market place are essential. Also the need to 'model' results before a pricing change is made is key with the identification of abnormal behaviour, in demand terms, instantly recognisable. Just the classic Yield approach really!
Comments
You must be logged in to post comments.