From Demand Elasticity to Market Plasticity: A Market Approach for Developing Revenue Management Strategies in Tourism

Abstract

Conventional revenue management assumes that markets exist and constrain companies. The concepts of market plasticity and "learning with the market" are reviewed in order to show how markets form and how companies can build capabilities for developing market-driving revenue management strategies. Focus groups with tourism professionals were conducted to validate the applicability of these concepts. The findings provide useful information about the professionals' understanding (i.e. market pictures) of tourism markets, the formation of markets and the factors creating them, and the professionals' readiness to engage with and shape tourism markets and the strategies used to achieve this. Three learning practices for managing markets are suggested, namely market-sensing, market picturing, and market scripting.