Although Venice is considered to be one of the most beautiful and romantic cities in the world, modern Venice has faced many challenges, including a loss of population to other parts of Italy and physical damage from flooding, pollution, and age. Th e basis of the Venetian economy is tourism. Th e beauty of the architecture and canals and the many artistic and cultural attractions of Venice draw over 20 million visitors per year from around the world.

Venice is set on over 100 islands interconnected by about 150 canals. All transportation within the city is either by boat or on foot. A ride on a gondola, one of the historical black boats of Venice, is considered by many to be part of the quintessential Venice experience. Although the demand for gondola rides is extremely high, the number of boats has dropped from several thousand gondolas in the 18th century to about 400 today. Gondolas are regulated by the City of Venice, and there is a strong desire to maintain their tradition.

However, at the same time, the economic impact on the city and its population is considerable. Th e question is how best to balance the maintenance of tradition with the economic impact on the gondolier and the city...........................

Questions 

1. What can be done to increase the capacity of gondolas? What revenue impact would this have?
2. How can you balance revenue maximization with the maintenance of cultural heritage? Is it possible? If so, what would you recommend?
3. Consider the pricing structure of the gondolas. What sort of changes would you recommend? How would customers react? What revenue impact would your recommendations have?