Seasonality and management of tourist demand in sustainable tourism development

Seasonality is an important issue for the worldwide policies in the Tourism Industry and to understand the competitive dynamics in the globalized tourism sector. According to the World Tourism Organization the limitation of seasonality can favour the sustainability of tourism. Literature suggests different ways to reduce the effects of seasonality, including niche products, product differentiation strategy, management of events and the pricing dynamics policies. Management practices could be suitable for tourism business but they could not be in coherence with a sustainable tourism development policy. This study appreciates the effectiveness of pricing policies (dynamic pricing models) in reducing seasonality, within the managerial system of revenue management, as well known in transports and hospitality industries. The research is based on a case study approach focusing its attention in two different destinations in Italy: Region of Sardinia, where seasonality constitutes a characteristic in the tourism activities developed in particular during winter time; and the city of Milan, where seasonality is a problem in summer period and where leisure and business tourism live together during the year. The study aims to give an answer to the following questions: 1) Is the dynamic pricing a managerial tool to control different flows of tourist during the year? 2) Is the dynamic pricing a managerial tool to limit seasonality and favour the sustainability of tourism? 3) Is the dynamic pricing able to support the tourism policies? The impact of tourism during the high season in the case studies was considered. Interviews were held with hospitality industry managers regarding price management practices, and their effects on demand were evaluated. This study shows that dynamic pricing strategies, as part of the revenue management system, have the potential to mitigate negative impacts occurring from tourism activities in destinations affected by seasonality, and contribute to sustainable tourism, improving business performance and tourist experience.