Intrepid clamps down on discounts

Intrepid clamps down on discounts
By admin

Too many tours and heavy discounting hampered Intrepid's financial result in 2012 as the adventure firm admitted it failed to manage yield and capacity efficiently.

Managing director James Thornton acknowledged he was partly responsible "for taking his eye off the ball" as too many trips departed with only a handful of passengers.

Revenue climbed more than 17%, with passenger numbers also strong but the bottom line result "was not where we would have liked it to be", Thornton said.

"We made a profit which was good but nowhere near the number we would have liked," he said. "One of the reasons was the discounting, it was just too high, certainly in the first half of 2012. What we did was bold and brash which stimulated the market but it impacted the bottom line.

"We also didn't manage our yields and capacity well enough so we had too much capacity. We had too many trips going out with six or seven passengers where for us we need nine, 10 and 11. There wasn't enough of that happening."

The last six months however has seen Intrepid refocus on yield capacity management. That, in turn, has helped reel in the deep discounting

"We have been incredibly successful since October in lifting that overall yield which is having a massive impact of the bottom line," he said. "2013 is looking healthy."

He said departures in the current quarter, Intrepid's second of its financial year, are healthy with Q4, its peak month, looking "incredibly strong".

The only blip is the third quarter which Thornton described as "sluggish".

"We are getting good bookings for longer and shorter term departures but that typical window of three to four months we are not filling as strongly as we have in the past," he explained. "I'm not concerned because the strong long and short term window is covering that three to four month period."

Rewarding consumers with early booking discounts and driving last minute sales were likeky to be behind the trend, he added.

With consumer confidence returning, Thornton said he was confident the bookings momentum would continue.

"With yield and capacity managed properly, a bit of capacity trimming, we are setting ourselves up for a strong year," he said.



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