Simulating the flavors of revenue management for airlines

Doreswamy, Goda; Kothari, Aditya; Tirumalachetty, Sumala

doi:10.1057/rpm.2015.42

Cited by 8 publications

(5 citation statements)

References 11 publications

(15 reference statements)

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“…Non-cruise literature such as airlines or industries involved in a nested network can be beneficial. For instance, Doreswamy et al's (2015) proposed forecasting model moved away from leg-based (voyage) to full origindestination (full itinerary) control can help to increase 1% to 6% of airlines revenue.…”

Section: **Insert Table 1**mentioning

confidence: 99%

Cruise revenue management: cross-discipline literature review and development of an integrated cruise revenue management framework

Chu

Hsu

2023

IJCHM

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Purpose This study aims to adopt a holistic approach to understand cruise revenue management (RM) practices that cover ticket and onboard revenues, through a cross-disciplinary literature review and practitioner interviews. An integrated cruise RM framework was developed and served as a blueprint for future cruise studies and practices. Design/methodology/approach A multi-stage approach was adopted, including a systematic literature review, two-waves of interviews with 26 cruise industry practitioners and the development of a holistic RM framework. Findings This study clarifies cruise RM functions across product planning, delivery stages and identifies ticket and onboard RM components. These are incorporated into the integrated framework, with weather and itinerary/ route attractiveness as additional considerations. Interviews revealed that there is no difference in the RM cycle before and during the COVID-19 pandemic, although strategies and tactics may vary in response to the market situation. Research limitations/implications Suggestions are made regarding product and service bundling and ways for ticket and onboard revenue teams to work together to optimize total revenue. Future research directions are also provided under the categories of RM applications and concepts, ticket core activities, onboard core activities and overall issues. Originality/value To the best of the authors’ knowledge, this is the first paper to conduct a cross-disciplinary systematic literature review of cruise RM without imposing publication dates or specific databases and the first to develop an integrated cruise “total” RM framework that includes ticket and onboard revenues.

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Section: **Insert Table 1**mentioning

confidence: 99%

Cruise revenue management: cross-discipline literature review and development of an integrated cruise revenue management framework

Chu

Hsu

2023

IJCHM

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“…On the other hand, Doreswamy et al, (2015) showcase a successful application of a simulator to test the implementation of RM systems. The researchers calibrated the simulator using real airline controls as a reference and reported the benefits that the use of these tools present.…”

Section: Chairs Comparison To Other Simulatorsmentioning

confidence: 99%

“…The associated benefits that a well-applied RM system reports to airlines justify the need for a simulation tool capable of replicating scenarios in controlled environments in efficient and affordable ways. Counting with the appropriate tools to propose and test new policies or adjust RM systems already in use by airlines can help RM practitioners learn (Cleophas, 2012) and improve their understanding (Doreswamy et al, 2015) of the problems faced in competitive environments. Such a tool could be essential in the industry's current state, with macroeconomic events rapidly shifting competitive contexts.…”

Section: Introductionmentioning

confidence: 99%

CHAIRS: A choice-based air transport simulator applied to airline competition and revenue management

Fukushi

Delgado

Raveau

et al. 2022

Transportation Research Part A: Policy and Practice

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“…The paper at hand follows these contributions in establishing a simulation-based framework to generate outlier observations. Doreswamy et al (2015) employ simulation as a tool to analyse the effects of different revenue management techniques for different airlines, when switching from leg-based controls to network controls. Cleophas et al (2009) focus on an approach to evaluating the quality of RM forecasts in the airline setting, both in terms of revenue and common forecast error measurements.…”

Section: Rm Forecasts and Forecast Evaluationmentioning

confidence: 99%

Identifying and Responding to Outlier Demand in Revenue Management

Rennie,

Cleophas,

Sykulski

et al. 2019

Preprint

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Revenue management strongly relies on accurate forecasts. Thus, when extraordinary events cause outlier demand, revenue management systems need to recognise this and adapt both forecast and controls. State-of-theart systems rely on analyst expertise to identify outlier demand both online (within the booking horizon) and offline (in hindsight). In light of the partial nature of revenue management data and censoring effects from inventory controls, so far, there exists little research on automating the detection of outlier demand. To remedy this, we propose a novel approach, which detects outliers using functional data analysis in combination with extrapolation via time-series forecasting. We evaluate the approach in a simulation framework, which generates outliers by manipulating the demand model. By evaluating the full feedback-driven system of forecast and optimisation, we generate insight on the asymmetric effects of positive and negative demand outliers in light of revenue management heuristics that do or do not account for customer choice. Furthermore, we quantify the value of both online and offline outlier detection. We show that identifying instances of outlier demand using our methodology, and adjusting the forecast in a timely fashion, substantially increases revenue compared to what is earned when ignoring outliers.

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Simulating the flavors of revenue management for airlines

Cited by 8 publications

References 11 publications

Cruise revenue management: cross-discipline literature review and development of an integrated cruise revenue management framework

Cruise revenue management: cross-discipline literature review and development of an integrated cruise revenue management framework

CHAIRS: A choice-based air transport simulator applied to airline competition and revenue management

Identifying and Responding to Outlier Demand in Revenue Management

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