Imagine having a detailed snapshot of your most profitable and least profitable tours. Or a high-level view of your highest selling time slots, as well as the ones that don’t sell at all.
Now think about how you can use this information to make more informed business decisions about when and where to best allocate your resources.
This is possible by studying your capacity utilization, a metric you can easily track on a booking platform like Xola.
In this guide, you’ll learn how your attraction can leverage a capacity utilization report to improve your operations.
What is capacity utilization?
Capacity utilization measures the percentage of a company’s potential output that is being realized. In other words, it’s a method of finding out whether your company is operating at 100% of its potential.
In the travel industry, this is also known as yield management. The practice was initially pioneered by the airline industry to help maximize revenue and profit per airplane seat.
Tourism attractions can similarly apply capacity utilization as an inventory management tool. A capacity utilization report, which is available via Xola’s booking platform, can show an escape room company how many of its rooms were booked at 100% occupancy in the last month.
It can further show what time slots are operating at full capacity, as well as those that aren’t.
Why is it important for tours and attractions?
Imagine you run a food and walking tour company, and each tour can have up to 15 guests. You run a tour in the afternoon and another in the evening, so you have a maximum capacity of 30 guests per day.
If you sell 25 spots, you use the formula above to find your capacity utilization rate. Divide 25 by 30 and multiply it by 100. You’ll find that your company is operating at 83% capacity.
You can dig further into your data to find out which time slot is operating at the highest capacity. Perhaps your 2 p.m. tour has 10 guests, while your evening tour has 15. You could then brainstorm ways to maximize your capacity and revenue — such as decreasing the number of spots available on your afternoon tour and increasing the spots available in your evening tour.
Understanding your capacity utilization also allows your company to offer different prices to different guests for the same time slot, depending on the fluctuations of demand.
You can specifically do this with Xola’s lightning deals, which are an effective way to fill up less popular time slots. A lightning deal is an automatic chat feature that shows guests relevant offers when they land on your website. These can be used to persuade customers to purchase less desirable time slots.
Another unique feature for tours and attractions is Xola’s waitlists. With waitlists, you can capture demand from interested guests even when your listing is fully booked.
For example, if you have a last-minute cancellation on one of your tours, you can notify the next guest on your waitlist that there’s an opening. This way, you can offset gaps in capacity due to those cancellations.
Finally, the data you get from a capacity utilization report can help you make critical staffing
decisions, such as adjusting staff schedules to accommodate your busiest days and times.
You can use the following formula to find your capacity utilization rate:
(Actual Output / Potential Output ) x 100 = Capacity Utilization Rate
Any number under 100% indicates that your attraction is operating at less than its full potential.
Let’s look at an example. If you run a kayaking company and each excursion has six kayaks with two people in each one, you have a maximum capacity of 12 people per trip.
If you sell 10 spots, you can figure out your capacity utilization rate, or yield percentage, by dividing 10 by 12. This means that you are operating at 83% capacity.
What’s the difference between capacity planning and capacity utilization?
Capacity planning is the process of anticipating the future business requirements of your organization. This way, you can ensure you have all the resources to address evolving guest and operational demands.
Capacity utilization, on the other hand, is a study into whether your business is using all the resources at your disposal to operate at 100%.
A capacity utilization report can shine a light on several operational aspects of your business, including whether your resources are being used in the best manner possible.
For example, you might have five employees working on your slowest day of the week. In reality, you’d only need one employee on the clock that day.
Now that you’re aware of this, you can allocate more employees and resources for your busiest days instead of over-staffing your slow days.
Your capacity utilization helps you understand your most and least profitable time slots — and therefore helps you allocate resources accordingly.
With Xola’s capacity utilization report, you can stop operating blindly and start making informed decisions based on real data.
If you are already a Xola customer, here is how you can access it.
Not a customer? Watch a demo here.