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This paper investigates how airline pricing strategies and revenues have evolved over time for unbundled flight products, using the eight largest U.S. airlines. Findings indicate that ticket exchange fees are being eliminated by network and low-cost carriers. On the other hand, baggage and seat reservation fees have grown more complex, with some carriers moving towards dynamic pricing. Ancillary revenues from unbundled flight products represent an increasing portion of airlines' total operating revenues, especially for ultra low-cost carriers. We estimate that the product unbundling trend has decreased revenues to the U.S. Airport and Airway Trust Fund by 4.0%–4.6% due to untaxed baggage and seat reservation fees alone. We also discuss government policies on ancillary revenue disclosure and pricing transparency, and the global COVID-19 pandemic's impact on ancillaries. [ABSTRACT FROM AUTHOR]

This paper proposes to create data-driven perspectives on airline ticketing data by defining groups of air travel itineraries independently of geographical or temporal attributes. We demonstrate the approach by analysing an extensive empirical data set featuring ticketing data from several carriers as collected by the Airlines Reporting Corporation. The analysis compares five cluster quality indicators to evaluate effects of pre-processing and clustering decisions. Benchmarking the results against a more traditional geographical grouping demonstrates the potential for data-driven analysis. Finally, we highlight ways in which the resulting cluster perspectives could support demand forecasting, performance evaluation, and analyst interventions. [ABSTRACT FROM AUTHOR]

The Airline Group of the International Federation of Operations Research (AGIFORS) held a conference in October 2020 that included keynote addresses from KLM Royal Dutch Airlines and Airbus, as well as three panels that included representatives from 11 airlines throughout the world that focused on how COVID-19 is impacting and reshaping the airline industry. This paper presents key themes that emerged from these discussions, including the impact of border closures on airline operations and demand forecasts; the shift in development priorities within revenue management departments; and outlooks for how passenger preferences, booking curves, and fare product restrictions may change after the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

Choice-based revenue management algorithms directly integrate a discrete choice model of customer behavior into the optimization function. In the classic formulation by Talluri and van Ryzin (TvR), the choice set is defined to include a no-purchase alternative, and the utility of this alternative is set to zero 'without loss of generality'. We show that only a limited number of discrete choice models can be used with the TvR formulation, and that misuse of the TvR formulation can result in significant estimation and forecast errors. Based on the Matching Shares Property of multinomial logit (MNL) models, we show that estimated choice model parameters will match probabilities in the estimation data set for MNL models that include alternative-specific constants (ASCs). MNL models that exclude ASCs may be able to match probabilities, but in this case the analyst cannot blindly set the no-purchase utility to zero. This property holds regardless of which method is used to estimate choice model parameters. [ABSTRACT FROM AUTHOR]

On 6-7 October 2011, the seventh annual Revenue Management and Price Optimization Conference was held at the Georgia Institute of Technology. This article summarizes key discussions that emerged from the conference and highlights the experiences of three companies portrayed in keynote addresses given by Scott Deaver, executive vice president of Strategy for Avis Budget Group; Greg Cross, senior vice president of Revenue Management for Hyatt Hotels Corporation; and Michael Diamond, senior vice president of Marketing for Time Warner Cable Inc. The article also describes a unique revenue management collaboration between an office product distributor and its independent dealers that was presented by Wilbur Reid, director of Strategic Pricing at SP Richards Company. [ABSTRACT FROM AUTHOR]

On 14-15 October 2010, the sixth annual Revenue Management (RM) and Price Optimization conference was held at the Georgia Institute of Technology. This article summarizes key discussions that emerged from the conference and highlights the experiences of two companies portrayed in keynote addresses given by Tom Seddon, Executive Vice President and Chief Marketing Officer of the InterContinental Hotels Group and Brian Rice, Executive Vice President and Chief Financial Officer of Royal Caribbean Cruises, Ltd. [ABSTRACT FROM AUTHOR]

This study uses booking data from 28 US hotels to investigate the validity of two key assumptions in hotel revenue management: (1) customers who book later are willing to pay higher rates than customers who book earlier; and (2) demand is stronger during the week than on the weekend. Empirical results based on an analysis of booking curves, average paid rates and occupancy rates for group, restricted retail, unrestricted retail and negotiated demand segments challenge the validity of these assumptions. Based on these findings, new recommendations for segmenting transient demand and setting weekday versus weekend pricing are provided. [ABSTRACT FROM AUTHOR]

On 6–7 October 2009, the fifth annual Revenue Management and Price Optimization conference was held at the Georgia Institute of Technology. The conference explored ways that firms are using to survive the current economic downturn and to position themselves to quickly recover as the economy rebounds. Several strategies for building a strong business case to secure funding for projects emerged from the discussions. In addition, the critical role of communication across divisions was emphasized. Strong communication helps create support for new projects, enables different divisions to focus on a common set of objectives and understand how their decisions affect key performance metrics, and facilitates the transfer of ideas and best practices. This article summarizes key discussions that emerged from the conference and highlights the experiences of three companies portrayed in keynote addresses given by Robert Cross, Chairman and CEO of Revenue Analytics; John Peyton, Senior Vice President of North American Operations at Starwood Hotels and Resorts; and Doug Bippert, Vice President of Business Acceleration at the Coca-Cola Company. [ABSTRACT FROM AUTHOR]

This paper summarizes the author's opinions as to how the Internet will influence the next decade of business and research directions in the airline industry. Potential impacts on the Internet on revenue management, pricing, itinerary choice, and new product development are reviewed.Journal of Revenue and Pricing Management (2009) 8, 247–254. doi:10.1057/rpm.2008.55; published online 16 January 2009 [ABSTRACT FROM AUTHOR]

On 11–12 November 2008, the Fourth Annual Revenue Management and Price Optimisation Conference was held at the Georgia Institute of Technology. The conference explored different business strategies that a wide cross-section of companies are using to manage the current economic downturn. Several common messages emerged from the discussions including: the increased importance of revenue management forecasts and monitoring activity; the increased need for open dialog among revenue managers with their sales and marketing colleagues and the critical role of targeted discounts to help avoid prices from spiralling downward. This paper summarises key discussions that emerged from the conference and highlights the experiences of three companies portrayed in keynote addresses given by Mark Shafer, Senior Vice President of Revenue and Profit Management at Disney; Dave Roberts, Senior Vice President of Global Revenue Management at Marriott and Brad Thompson, Chief Pricing Leader at GE Corporate.Journal of Revenue and Pricing Management (2009) 8, 279–286. doi:10.1057/rpm.2008.61; published online 16 January 2009 [ABSTRACT FROM AUTHOR]

This paper summarizes the author's opinions as to how the Internet will influence the next decade of business and research directions in the airline industry. Potential impacts on the Internet on revenue management, pricing, itinerary choice, and new product development are reviewed.Journal of Revenue and Pricing Management (2009) 8, 247–254. doi:10.1057/rpm.2008.55; published online 16 January 2009 [ABSTRACT FROM AUTHOR]

On 11–12 November 2008, the Fourth Annual Revenue Management and Price Optimisation Conference was held at the Georgia Institute of Technology. The conference explored different business strategies that a wide cross-section of companies are using to manage the current economic downturn. Several common messages emerged from the discussions including: the increased importance of revenue management forecasts and monitoring activity; the increased need for open dialog among revenue managers with their sales and marketing colleagues and the critical role of targeted discounts to help avoid prices from spiralling downward. This paper summarises key discussions that emerged from the conference and highlights the experiences of three companies portrayed in keynote addresses given by Mark Shafer, Senior Vice President of Revenue and Profit Management at Disney; Dave Roberts, Senior Vice President of Global Revenue Management at Marriott and Brad Thompson, Chief Pricing Leader at GE Corporate.Journal of Revenue and Pricing Management (2009) 8, 279–286. doi:10.1057/rpm.2008.61; published online 16 January 2009 [ABSTRACT FROM AUTHOR]

On 2nd–3rd October, 2007, the third annual Revenue Management and Price Optimization conference was held at the Georgia Institute of Technology. The conference explored how multiple factors, including fragmentation of customer markets, transparency in markets, and globalisation, have spurred a transformation from intuition-based to analytical-based decision making across many industries. Panellists included representatives from industries spanning airline, hotel, gaming, grocery, jewellery, package delivery, consumer goods, manufacturing, and consulting. This paper summarises key discussions that emerged from the conference and highlights success stories portrayed in keynote addresses given by James Whitehurst, former chief operating officer of Delta Air Lines; Rick Campana, vice president of Corporate Marketing of the United Parcel Service; and Chuck Neville, executive director of Finance of General Motors Service and Parts Operations.Journal of Revenue and Pricing Management (2008) 7, 219–229. doi:10.1057/rpm.2008.3 Published online 22 February 2008 [ABSTRACT FROM AUTHOR]

This study is one of the first to examine factors that influence the decision to fly and itinerary choice for customers using online distribution channels. Stated preference data from individuals using an online search engine are used to estimate multinomial and nested logit models for US markets. These models incorporate a new formulation for capturing willingness to pay to travel by air and willingness to pay for air service improvements. New insights into the influence of deviations in individuals' preferred departure and arrival time on itinerary choice are also reported.Journal of Revenue and Pricing Management (2007) 5, 271–290. doi:10.1057/palgrave.rpm.5160052 [ABSTRACT FROM AUTHOR]

On May 18, 2006, the second annual Revenue Management and Price Optimization conference was held at the Georgia Institute of Technology. The theme of the conference was on how the Internet is changing traditional revenue management and pricing practices. The conference brought together experts and thought leaders from more than 30 companies spanning airlines, hotels, car rentals, cruise lines, apartment rentals, aircraft manufacturing, retailing, distribution, e-mail marketing, on-line travel, logistics, sports, performing arts, software providers, and others. This paper summarises the key discussions from this conference and synthesises experts' perspectives on near-term opportunities and challenges facing their industries.Journal of Revenue and Pricing Management (2006) 5, 237–247. doi:10.1057/palgrave.rpm.5160042 [ABSTRACT FROM AUTHOR]

This study models airline passengers' no-show and standby behaviour using passenger and out-bound and inbound itinerary information. It describes factors that influence no-show and standby behaviour in continental US markets using multinomial and nested logit models. The model accounts for early standby opportunities on other itineraries flown by the carrier of interest, ie it incorporates information about booking levels on the carrier's itineraries departing on the same day. Empirical and validation analyses highlight the importance of distinguishing between outbound and inbound itineraries. It concludes by describing a framework carriers can use to implement the no-show model. [ABSTRACT FROM AUTHOR]