Continuous Pricing in the Tourism Industry: Lowering Ticket Prices and Improving Yield Management

2024-02-03 12:40:00

So much for the overall context, which does not mean that companies are no longer trying to attract travelers. It is in this vein that the “continuous pricing” system is currently being put on the table by different companies. This “continuous pricing” would have the advantage of lowering the average ticket price, as we can read on the specialized Déplacements Pros site. “We very clearly remember an AFTM convention last spring, where Bertrand Flory declared, alongside an acquiescing Cédric Renard (respectively commercial director and general manager of Emirates in France): “With continuous pricing , the prices will be lower or, at worst, at the same level as via a GDS reservation”.

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Clearly, the “continuous pricing” system is not very different from the current system. Prices change depending on the period and customer demand. But these are the price levels that could change. Instead of crossing levels of €10 or €20 with each price change, these levels could be crossed more often, but with changes of €2 or €3. The promise ? A lower average price for tickets, and the possibility for travelers not to find themselves with a sudden price increase two or three days apart.

The question now is when this system could be implemented on a large scale. Casually, this represents millions of euros of investment for airlines, because this system would be part of a global evolution of the way aviation operates. Negotiations are also underway between the various players in the sector. “In fact, continuous pricing clearly aims to improve our yield management. I specify that it is played out to the decimal, but the margins of the companies being so reduced, it is not a luxury […] The average ticket price should fall, but continuous pricing is for the last 20 or 30 seats to be sold: with this system, we are much more precise in reaching the willingness to pay (the price that the potential passenger is ready to pay). to pay, Editor’s note)”, we read again in the Déplacements Pros article.

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