b'FOGHORN FOCUSDynamic PricingHOW TO MAKE AN EXTRA BUCK ON EACH TICKET JOHN BERTELL // CARUS W ith the uncertainty of the market, limited availability of crew,We are in a situation where we must be prepared to adapt to changing and the COVID-19 situation still affecting our daily business,scenarios and have a system in place that reacts immediately upon a surge it is more important than ever to ensure that we sell our prod- in demand and adjusts pricing accordingly to protect our revenue. By ucts as smoothly and efficiently as possible, and at the optimum priceselling tickets according to demand-based pricing, you can do exactly at every stage of the sales window. Most passenger vessel operators arethat. It is somewhat like letting the market decide what the price is to be, working with travel products and pricing structures that lack flexibility.and adjusting to that in a controlled manner. Vessels, destinations, and infrastructure are heavily based on investments that have been in place for many years. Now, we must work smarter toStart by identifying your most valuable sailings, those that are never a make the most out of the fixed inafrastructure currently available. Thisproblem to fill, and ensure they are never discounted. If they are in high goes for all operators, whether they be simple transportation services,demand, customers will buy those tickets, even if you must wait until sightseeing, or dinner cruise services. the last minute for them to purchase.Veryoften,thecompetitioncomesWe need to be innovative toYour dashboard will show you how notfromotherpassengervessels,the market is going, how your book-but from other modes of travel andachieve additional revenue.ing levels are tracking, and the market entertainment. So, it is not just aboutreaction to your pre-defined scenarios raising the prices to get more revenue.One way to do this is tokicking in to raise or lower the pric-We need to be innovative to achievees.Ifyourpredictionsturnoutto additionalrevenue.Byfocusingonimplement dynamic pricing.be wrong, you can make immediate thedetail,youcanmakeanextrachanges to another scenario. And you dime, an extra quarter, and even ancan manage this week by week, day by extra dollar on every single ticket. One way to do this is to implementday, sailing by sailing. Over time, as your data builds up, you will become dynamic or demand-based pricing. Dynamic pricing has been aroundmore adept at predicting the market for a given sales period.for decades, and whilst the airlines use it very effectively, it is still not fully taken advantage of within the passenger vessel industry.You might say: But my customers are used to our prices. They would complain if I tried a new pricing model. They are used to knowing PHOTO: THE BIALONS / UNSPLASH We are currently working in one of the most unpredictable marketsexactly how much a ticket costs. I would say to think about who you we have ever seen. Some may decide that an expensive, hard-hitting adare competing against. Many of your competitorsairlines, events, and campaign is the way to go and advertise discounted fares to encourageentertainment servicesare already doing this very successfully. customers to travel in order to try and ensure the volumes for the coming season. But what if everyone takes up the offer and buys their tickets atWhat if your prices are regulated? Well, that is a challenge, but I am pret-the discounted rate? Yes, you may end up filling the vessels, but withty sure there is something in your pricing which is not regulated such as $9.99 tickets. How then will you cover the cost of operating which isparking, seating, onboard dining, priority boarding, or or other elements only getting more expensive with the rise in fuel prices? of the experience you offer guests.FOGHORN 28'