Revenue management vs school holidays

Revenue management vs school holidays

A news story in the UK press ran a couple of weeks ago about Term-time holidays: Supreme Court rules father must pay fine for taking daughter out of school.

John Platt had declined to pay a £120 fine after he took his daughter to Disney World during the school term. He was prosecuted by the Isle of Wight Council after refusing to pay the fine for taking his daughter on a family holiday to Florida in April 2015 without first asking permission from the school. Local magistrates found there was no case to answer and judges in the High Court later upheld that decision, citing that John Platt was not acting unlawfully as his daughter had a good overall attendance record of over 90%. However, the Supreme Court overturned this decision, ruling that regular attendance should be in keeping with rules of each individual school.

The reason that Mr Platt was taking his daughter out of school before the end of term and whisking her off to Disney was to take advantage of off peak pricing. With a shadow of a doubt, he would have saved far more than the £120 fine that he declined to pay.

The publicity surrounding this story led to journalists such as Michael Gove, citing, “I recognise that unscrupulous tourism firms will try to rack up the costs for time away during the school holidays.” in The Times.  Yet papers such as The Independent took the opposite view, suggesting that school holidays should be staggered. Its headline said, “It’s up to schools, not the travel industry, to deal with the exorbitant cost of holidays.

I wrote a blog post at the end of last year: Is Total Profit Management the Way Forward, reminding us that revenue management capitalises on changing demand by varying prices accordingly, so leading to increased profitability.

The travel industry has practiced revenue management for decades, raising prices during peak demand periods and keeping prices down when demand is low. Yet it is only in the last few years that this has become a high profile concern. Three years ago, 170,000 people signed a Government petition to ‘Stop holiday companies charging extra in school holidays.’

Reading the comments on recent media articles about the subject throws up gems such as “it’s all down to the greed of travel companies” and “The government should stop allowing holiday companies to create price hikes at school holiday times.”

So what has changed in recent years? Are our revenue management systems varying prices more than in the past? Have our customers become more uppity as they get used to sharing their opinions on social media?

I see revenue management as a necessary part of the industry, staving off losses rather than leading to super-high profits. The concern is that if Governments, encouraged by public opinion, were to bring in legislation that limited price differentials, there could be serious implications for the continued profitability of our businesses. Prices would be overly high in low season leading to a reduction in off peak bookings and too low in high season, leading to a reduction in revenues from our limited inventories. Some travel companies would undoubtedly move into loss and, perhaps, might have to shut down.

ABTA Chief Executive, Mark Tanzer, wrote in a letter to The Times that perhaps Michael Gove, as an MP and former Education Secretary, could help families by supporting the introduction of staggered school holidays, just as happens in France and Germany?

Then again, perhaps the UK travel industry needs to be more proactive in lobbying Government on this matter before it’s too late?

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Paul Richer is Senior Partner of Genesys, a management consultancy specialising in providing advice on technology for the travel, tourism and hospitality industries. Genesys has built a worldwide reputation for its knowledge and experience of new system procurement, online technology and strategies including website audits and online booking systems, reviewing and formulating companies’ IT strategies and more. Clients include many of the best known names in travel. Paul has co-authored several reports examining the impact of technology on the distribution of travel, including “Distribution Technology in the Travel Industry” originally published by Financial Times Retail and “Marketing Destinations Online – Strategies for the Information Age” published by the World Tourism Organisation. He has presented at and chaired many online travel conferences, is regularly quoted in the press and has also been invited to make several appearances on television to debate the subject. Prior to founding Genesys in 1994, Paul was Business Development Director of Finite Group plc and Head of the Group’s IT strategy consultancy. He holds an MBA from Cranfield School of Management, is a Fellow of the Institute of Travel & Tourism and Member of the Chartered Institute of Marketing. More information at

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