The attractions sector was heavily challenged due to the pandemic, resulting in timed entrances for capacity management which completely disrupted walkup ticket sales. With this ticketing shift to pre-booking, revenue management tactics have been naturally applied, laying the infrastructure for increasing their yield.
Of course, mega attractions and theme parks like Disney rolled out yield management strategies prior to the pandemic as a way to offer travellers deals and spread out congestion during peak periods. Managing crowding not only optimises guest satisfaction with shorter lines but also creates more opportunities for purchasing merchandise and dining in restaurants due to less time spent waiting in the queue. We can look at this sector for ideas for applying dynamic pricing to tours, activities, and transportation.
Must haves for dynamic pricing for tours and activities
- All of your systems—res tech, ticketing, distribution, etc. must be able to play with the advanced pricing rules creating dynamic pricing.
- Must have the willingness to test and set up the pricing rules from the outset.
- Automatically synced pricing (real-time push and pull communication) with the OTAs.
Building blocks for a dynamic pricing strategy
Palisis has been offering variable pricing options within our solution, starting this strategic shift for operators. The use of our dynamic pricing rules suggests that the tours and activities segment is ready to implement pricing that reflects the economy, availability, demand, special events, and for optimising profits.
But are the OTAs ready to play with dynamic pricing? While we wait, we need to prepare for changes: how will the contracts with the OTAs change, what types of requirements will they have about price parity, and what other factors to consider? Working with pricing rules is a frequent topic at the centre of development conversations with our OTA partners.
Palisis’ functionalities include:
- Price based on booking window (think: discounts for advance bookings)
- Based on bookings (think: price changes based on the amount of tickets you have booked for a departure/day)
- Different prices for different days of the week (think: weekend vs weekdays)
- Different prices for different times of the day (think: early morning vs popular mid-day)
- Seasonal/ special event pricing
We have all sales channels connected in one system, which means we create true dynamic pricing based on the demand of all your requests or channels. No matter if the demand comes from e-commerce, OTA traffic, walk-up sales, etc., we have you covered with our powerful data infrastructure. Palisis’ pricing matrix outperforms any other system that sets up pricing based on individual departures, allowing changes to be applied efficiently.
Just because all channels are connected doesn’t mean you have to apply dynamic pricing to all areas; we are true believers in testing, testing, and a little more testing. This means that you can test avenues for where yield management might be most effective.
Let’s think back to when OTAs were first on the scene. Tour operators were apprehensive to start listing with them. Trying out dynamic pricing will be a similar learning curve; operators will sample dynamic pricing in one or two areas, like listing your product on one OTA in the beginning.
“I’m excited to see what operators will do with the technology we deliver, giving access to the next level by applying dynamic pricing. Let’s see how tour and transportation businesses grow across the board,”
Josef Birchler, Palisis VP of Sales.
The path of dynamic pricing has been paved
It is going to be vital that operators educate themselves on what goes into the dynamic pricing strategy. We can look to a few of the sectors that have already paved the way and borrow from their learnings. With standardisation challenges, we are nowhere near the sophistication of monitoring our competitors’ online pricing. But that doesn’t mean we shouldn’t start adapting strategies that will work for tours and activities.
Will you be in Berlin next week? Check out a few of the sessions at Arival and ITB Berlin that cover yield management.
Hotels have had Revenue Managers on staff for years. Monitoring and working as the go-between for the sales and finance departments. This may be a role for which larger tour operators start to hire. However, the smaller operators will equip themselves with savvy tech solutions that empower them with agile pricing models and rules.
Review your tech and ticketing solution
Does your res tech already offer rules for revenue management? Imagine, your intuitive reservation and ticketing software monitors and suggest and/or alerts you of missed revenue opportunities. This is the path forward.
Palisis has dynamic pricing features already available, is a part of the movement forward in this space and continues to develop more resourceful tools to enable operators to grow their businesses in multifaceted ways. If you want to chat about how our all-in-one eco-system can help you shift to a yield management approach—reach out to our team.
We also invite our industry colleagues to join us in the conversation about standardisation. We look at interpreting the data and analytics, applying the models, and monitoring the agile pricing. See you at Arival and ITB Berlin.
Don’t miss our last article, Dynamic pricing and customer satisfaction: How to strike a balance—for even more on this topic.
About Palisis
Palisis is the leading technology provider of comprehensive sales and operations solutions for tourism and transportation businesses around the world. Due to its rich experience, specific market knowledge, consumer centricity and process orientation, Palisis is the industry technology pacemaker. As a full-service provider, Palisis supports your business processes and operational procedures with the most efficient and reliable solution available. Today, Palisis solutions are successfully and effectively used by customers in over 100 countries around the globe.