Sports Tour Business - Research Paper Example

The skiing business is highly seasonal in nature. The actual ski season lasts from mid-December through to April if it is short. It lasts from the weekend before Christmas day to the end of March. In terms of pricing various factors are put into consideration such as: - This is the period between September and January. January is the back to school period, which ushers the start of the peak ski holiday booking period. September is the start of operator's main marketing programs. This is between February and April.

Many operators discount to fill the later shoulder season dates of March and into April. Easter falling in April helps to extend the ski season, while Easter falling in March tends to shorten the ski season although Easter dates in March will tend to sell better because of the perception of better show in March than in April. This is the period between May and August. It sees a trickle of bookings with operators offering special deals and bookings in centers to get as many early bookings as possible.

This period will also be used to focus on the supply side of business as well as finalizing marketing campaigns. However, this is not an ideal situation in terms of operations and finance and to supplement revenues in the otherwise quieter summer season.(d) Late Booking PhenomenonThis is booking made three weeks or less in advance of the departure date. The internet has been the driver of this through the advent of a multitude of late booking sites, as well as snow report sites that publish real time snapshots of ski slopes through web cams and up to the minute reports on snow conditions.

In determining the revenue to be generated from skiing, the following assumptions are made: -There is always an increment of 5% in the price of ski package holiday over the next three years. The current price being 677.The growth in the number of ski package holidays in the next three years (other factors held constant) is 3%. The current number being 3,500.Source: industry analysisTherefore: 2007 2008 2009Price 677 711 746Growth 5%Number of Packages 3,400 3,502 3,607Growth 3%Revenue 2,301,800 2,489,922 2,690,867Cash FlowPayment delay is typically 30 days to suppliers (airlines and accommodation agencies).

Ski tour operators take a booking deposit of approximately 35 - 150 per person. The remainder is payable in full prior to departure/commencement of the holiday which is ideally10 weeks before departure but in practice holiday balance can be chased up until the ticketing period, which generally three to four weeks before the departure date. Late bookers can also be subject to cover the administrative expenses of getting tickets to the airport for collection by the customer the day of departureManagement and cash implicationsThe figures show a growth in price and demand of 5% and 3% respectively.

To maintain this price and demand growth, management has to undertake certain issues such as: -Provide online bookings - This will smoothen booking exercises for customers who are busyLow cost airlines serving ski