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Four market experts offer advice to SunTours, the middle-market tour operator
A Robert Worth
Marketing to a wider audience could lead to more people buying direct from SunTours rather than going through travel agents, and the consequent reduction in agents' commissions might boost company profits.Towards the end of the season, reducing the cost of holidays would attract last-minute customers, thus avoiding any possible loss on unfilled accommodation and flights. The company could also increase profits by selling more specialised holidays here in Britain, perhaps by offering breaks at historic sites and coastal destinations.
B Steven Worrel
Whether it's worth discounting surplus holidays is an arguable point, as it not only cuts into profits, but alsoresults in budget-conscious holidaymakers being put next to SunTours' more affluent customers, thus damaging the brand. It may seem attractive at first because of tight margins, but SunTours should think twice before taking up this option. Currently,SunTours is planning to sell higher-margin holidays to previously 'unmarketed' destinations for which demand is greater than supply. It is likely that accommodation providers in these emerging holiday destinations will be more flexible when it comes to setting terms.The firm should go ahead with this policy.
C Ursula Capalbo
Good risk management and higher sales can guarantee higher profits. Although SunTours has always been averse to planning, the company would in fact benefit from a risk model that forecasts the impact of discounting on cash flow and profitability throughout the year.SunTours would then be able to change direction when things go wrong, as they inevitably do from time to time. Diversification can increase rather than spread risk, so caution is needed as the company enters regions where facilities for tourists are not yet fully developed. Targeting customers nearing retirement age, whose disposable income and leisure time are increasing, would be ideal.
D Gillian Wilmot
SunTours knows that good relationships with customers is the key to success in the travel business. With this in mind,the company should consider that brochure mailings, unlike electronic communications, can attract customers and maximise year-round opportunity.They encourage summer tourists to take another break and can even be used to send a thank-you letter to returning customers. Selling holidays at a reduced priceis definitely not a sensible option. A better choice would bevalue-added promotions which can improve profitability and build on SunTours customers' desire for high-quality service.
