Blog homeSorry it has been so quiet recently on this blog - but right now am maxed out on TourCMS and also project managing various tour operator reservation systems projects (some using TourCMS, others not).
Revenue management is a tool to enable some form of price changing dependent upon demand. Airlines use this so, perhaps, as flight availability reduces, the price goes up. Likewise revenue management can be used to adjust availability (rather than just price) - so you may close availability on basic level products forcing later bookers to purchase higher level product.
Revenue management is really very efficient when done well - and can provide good results. (However revenue management systems can be expensive - and do require expert understanding of the likely demand factors for your product - and it can get complicated).
Hotels use revenue management sometimes to say “no availability” for, say, a one night reservation for one room - when, by taking this booking, they will have to turn away a booking for one week - for the same room. (Their software will tell them that they are likely to receive a booking for a week - sometime soon - so in this situation it is worthwhile, on balance, turning away “bird in the hand”.
Expedia have just taken a dislike to me, via their revenue management system….. I fancy going to the EyeforTravel Travel Distribution Conference China 2007 - taking place in Shanghai at the end of August. So…. off I go to Expedia to check flight prices….
Firstly here is London to Shanghai - for one person
…and the same results, but this time searching for 2 people:
How come you can take 2 people for £1413 but one person for £1840 !
The key difference is that Expedia have a “special fare” which, it would appear, their revenue managent system is only going to offer me if I take another person! Anyone fancy going to China?
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Interesting point alex. In my experience as a user of travel sites, trying to second guess what causes these little anomolies is pretty much impossible. However, from worked for a supplier of these products, they are indeed very sophisticated both in their application of the ‘decisions’ the system makes, but probably more importantly, the forecasting ’science’ and mapping historic seasonality and trends into the future.
But what might be a little more fun would be a revenue management anomoly hunt. Are you offering a prize for the most outlandish result produced by a revenue management system? If so i might dip into a rail travel site. These are usually completely unfathomable!!
Hi there,
Hopefully I will see you in Shanghai at the conference. I am currently researching RM issues for my Travel Distribution Summit Asia (18-19 March). If you have any points that you would like to see covered, let me know! Cheers. Nick (EyeforTravel).