2. Creating a Stable Revenue Generation Model via diverse sales channels, customer segments and markets

As outlined in the introduction, once the tourism business product/saleable experience catalogue is defined, the tourism business can grow revenue via three-key methods:

Once the tourism business understands exactly how to engage and create opportunities via diverse sales channels, markets and customer segments, it can plan how to build a stable revenue generation model by blending the revenue generation potential from each of these three opportunities.

The tables below illustrate how diverse tourism businesses might consider how to build their stable revenue generation model. You will note that tiers 1, 2 and 3 deliver revenue via diverse sales channels and customer segments as follows:

Balancing Revenue via Tiers 1, 2 and 3 across seasons

Many tourism businesses apply a 30%-30%-30% rule to this tiered revenue generation model, allowing approximately

• 30% of revenue from tier 1, base business
• 30% of revenue from tier 2, adhoc group business
• 30% of revenue from tier 3, individual business 

While the proportions will change based on the tourism business type, the 30%-30%-30% rule serves to remind the business of the importance of integrating diverse revenue generation opportunities to

• create a reliable foundation for revenue generation
• encourage revenue generation stability and
• achieve as close as possible to 100% sales of all available inventory

Most importantly, by integrating diverse revenue opportunities across these three tiers, the tourism business can fluctuate sales across diverse sales channels and customer segments to maximise revenue generation across all periods and seasons. For example, a tourism business

• can use contracted leisure business via a tour operator to compensate for a reduction in contracted corporate bookings during summer seasons
• language students and active retired groups can be offered an attractive rate to arrive during quieter times to increase demand when business is most needed
• can create promotional campaigns and offers to increase the proportion of bookings to increase demand via repeat customers and individual customers during low and shoulder seasons

The 30%-30%-30% rule is useful for: 

• ensuring the tourism businesses reduce risk by blending diverse sales channels, customer segments and markets for a stable revenue generation foundation.
• reminding tourism businesses to create a reliable revenue generation foundation
• fluctuating diverse sales channels and customer segments to ensure maximum sales across diverse seasons
• ensuring as close as possible to 100% sales of inventory

Domestic and Global Markets:

Through tiers 1, 2 and 3, the tourism business integrates diverse sales channels and customer segments. To increase stability, these sales channels and customer segments can include customers from diverse markets including

• Northern Ireland
• Republic of Ireland
• Key global markets for Ireland: United States, Great Britain, France, Germany, Italy and Spain
• Emerging markets: such as China

In the same way that island of Ireland customers can make holiday plans during school breaks throughout the year, global customers also travel at different times based on the annual calendars and celebrations that apply to their destinations.

Once a tourism business understands these kind of travel behaviours, it can blend diverse markets to create year-round revenue generation opportunities.

By blending markets, a tourism business can create revenue generation opportunities that

• supports a stable revenue generation model 
• encourages year-round booking opportunities