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5 reasons why revenue management is important for tour operators

5 reasons why revenue management is important for tour operators

Jun 17, 2022
6 min read

Seasonality can be one of the many challenges that tour operators and other travel companies face every year. An effective revenue management strategy can be the solution to drive higher revenues throughout the whole year. 

But much more than just the profits — which is the ultimate result — this business technique will offer a clear overall roadmap on how your company can make the right decisions. That includes tours, services, distribution channels, pricing, and, of course, sales.

But how does revenue management work for tour operators? Why is it important? How can you implement it in your travel business? We've listed everything you need to know about revenue management as a tour operator.

What is revenue management?

Revenue management is a business technique in which you analyze all your booking-related data to understand your customers' behavior and maximize your sales opportunity.

When you have an overview of your booking capacity, booked tours, and where and when your customers booked with you, you can predict your customers' behavior and optimize your products and prices. By doing so, your company will have multiple benefits. 

With good revenue management, businesses can make better decisions regarding pricing, distribution, optimizing inventories, and maximizing profits.



You can learn more about Revenue Management for Experience Providers in this previous article.

How does revenue management work for the tourism industry?

The hospitality and travel industries are great examples of revenue management strategies. It applies to fluctuating flight prices and accommodation prices too. The prices change according to the travelers' behavior. So the times and dates that are more likely to sell out are also the more expensive.

The same applies to any company or tour operator with an inventory and a fixed capacity. If you know your busy times, you can benefit from dynamic pricing and have a cost-effective solution for your company and your customers.

Why is revenue management important for tour operators?

A good revenue management strategy isn't beneficial only for airlines and hotels. Tour operators and activity providers have a lot to benefit from too. But there are some key aspects to look into: how can you identify market opportunities? Which takeaways are useful for your company? How can you adapt your tours and offers to the market? A well-planned revenue management strategy will give you all the answers. Here are the 5 steps to building your own strategy:

1. Identify market opportunities

There are many ways of identifying market opportunities. Start with references in the tourism industry, such as the World Tourism Organization and the World Travel & Tourism Council, or even your local DMO and other reliable tourism sources. But after understanding the overall scenario and tourism trends, the key is to also dive into your business data.

Some of the main resources to take a look into are:

  • Google Analytics: find all the information about your website’s usage. From the audience, traffic sources, and even conversions, so you can calculate your website’s ROI. Google also has the Search Console tool, where you can check more info about your organic results, and Google Trends, which shows the data about online research on Google.

  • Social Media Insights: Instagram, Facebook, LinkedIn, Twitter, TikTok, and all the main social media channels have the “insights” or “analytics” sections or reports, which will also include data about your audience, reach, and engagement. This way, you will see who you’re talking to in those channels, what type of content drives the best results, and other relevant information. 

  • OTA’s: if you’re selling tours through OTA’s and other online resellers you must also get sales reports and understand your target preferences within those channels.

  • Direct bookings: more than the website traffic, if you’re selling tours on your website you must also check the revenue data on it. How many tours are you selling directly on your website? How many days in advance do people usually book? A booking software like TrekkSoft allows you to optimize your tours and get plenty of information about your online sales from the Business Intelligence section.

Once you analyze your company's revenue data, it'll be easier to identify possible market opportunities and demands. With this precious information, you can adapt your services or even create special tours and prices according to the market.

For example, with the COVID-19 pandemic, many companies had to review their cancelation policies to offer more flexible and conscious offers. From time to time, it also happens that a specific destination might get extra attention due to TV shows or movies.

All of that might impact your business, and good revenue management strategy will help you identify these opportunities.



2. Get to know your customer

By understanding your customers' behavior, you can meet their expectations or even needs. Your company can improve its services, marketing, and pricing with that in mind.

After using the tools listed previously, more than just understanding the market in general and its opportunities, you will have plenty of information about your digital relationship with your customers. Some aspects to keep in mind are:

  • SEO: from the organic searches, what are the main keywords driving traffic to your website? What people are usually looking for when they find your company? Make sure that your website visitors will easily find that information on your website or tour page.
  • Social Media: more than just having followers, your social media channels should also have an impact on your revenue. From the “insights” section you’ll see your audience’s age, gender, region, and many other relevant data. Make sure that is aligned with your services and tours, and if you identify market opportunities do some testing.
  • Paid Ads: if you’re running paid ads on Google or social media channels, it’s a must to look into the reports. After all, you’re investing your money in it. Double-check which type of ad is getting the best results: does it have a specific Call To Action? Does it include attractive images of your destination and tour? Identify what’s working and what’s not working, and build up a strategy from that.

For example, you might notice if your clients are more likely to book in advance or get a last-minute booking. If you're getting too many last-minute bookings and it's more interesting for your company to sell tours in advance, you can create unique campaigns or even prices to balance that.  

3. Promote low season

One of the main points of revenue management is that once you better understand your customers' preferences, you'll learn about their favorite months, dates, times, and tours. Therefore, you can work with dynamic prices, offering a lower price during low season or quiet dates. This way, you'll also open the opportunity of attracting new clients, such as locals.

Let’s say that you identify that during high season you get groups of friends and big families, and during low season you’ll have more solo travelers and couples. In that case, you could create group offers, or even create an exclusive couple tour during the low season. Ultimately it will depend on the data you find and your analysis of what’s relevant for your business.




4. Get more direct bookings

Once you learn about the tourism trends and your own audience and even identify market opportunities, make sure you're offering what your target groups likes and expects. It goes from adding key information to your website and tour pages to creating special products and offers accordingly. This way is much easier to promote your website. If you learn about your market and your customers, you'll be able to reach a more qualified target.

By doing better marketing and adapting your services, you'll have higher chances of getting travelers to book directly on your website, reducing the fees and costs.


5. A better financial outcome

A better financial outcome is the ultimate benefit of having a well-done revenue management strategy in place. With all the previous steps in place, your sales process, approach, and pitch will put your company in a much better scenario. You'll have the opportunity to sell more, talk to the correct public, and improve your profits.


Check out 3 successful revenue management strategies adopted by tour operators

How to implement a revenue management strategy?

As you've learned, the main point about revenue management is data analysis. Therefore, the first step is getting a booking system that collects your business' data. This will allow you to analyze your sales and customer information, gain new insights, and forecast opportunities. 

With all the data in your hands, you must also take the time to analyze it all and get your revenue management strategy correctly planned.



With TrekkSoft, you can keep track of your sales flow and manage multiple selling channels in one place. You'll be able to identify your peak periods, shoulder months, and customer preferences. Therefore, you can decide how to allocate your availability to OTAs, have your website and payment gateway to get direct sales and higher profits, and even manage all of your resources in one place.

Revenue management is an essential technique for tour operators who want to improve their services and sales. It allows you to better understand the market, your customers, and your business. This is key to improving your services, marketing, and profits.

If you want to have more direct bookings, download now our free ebook on how to improve your conversion rates and get your website ready to skyrocket its sales.


Schedule a call with our team!


Maria Eduarda Possamai
Posted by Maria Eduarda Possamai
Brazilian social media analyst and content writer who likes traveling, camping and listening to some good music. You may call her Duda.
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