An Empirical Analysis of Delhi - Mumbai Sector Flight Fares

Author(s):  
T. Godwin

Revenue management is the art and science of making the right product or service available to the right customer at the right time through the right channel at right price. Dynamic pricing plays a crucial role in the implementation of revenue management in passenger airline reservation system. The liberalization of domestic aviation sector in countries such as India has seen many new market entrants resulting in higher competition while setting the flight fares. The variation in flight fares of Delhi – Mumbai passenger airline sector is studied for a departure date based on the number of days in advance the booking is made. Descriptive and inferential statistical analyses of the fares reveal the impact of airlines, booking channels and departure time windows on the pricing decisions of flight fares. The analysis framework of this study could be used as a basis for a continuous tracking study of flight fares by airline revenue managers to help them arrive at the right fare for each fare class of a flight.

2017 ◽  
Vol 4 (4) ◽  
pp. 60-78
Author(s):  
T. Godwin

Revenue management is the art and science of making the right product or service available to the right customer at the right time through the right channel at right price. Dynamic pricing plays a crucial role in the implementation of revenue management in passenger airline reservation system. The liberalization of domestic aviation sector in countries such as India has seen many new market entrants resulting in higher competition while setting the flight fares. The variation in flight fares of Delhi – Mumbai passenger airline sector is studied for a departure date based on the number of days in advance the booking is made. Descriptive and inferential statistical analyses of the fares reveal the impact of airlines, booking channels and departure time windows on the pricing decisions of flight fares. The analysis framework of this study could be used as a basis for a continuous tracking study of flight fares by airline revenue managers to help them arrive at the right fare for each fare class of a flight.


2012 ◽  
Vol 48 (3) ◽  
Author(s):  
Soheil Sibdari ◽  
Mansoureh Jeihani

This paper shows how tolling (or pricing) strategies can be used to control the congestion levels of both untolled and high occupancy toll (HOT) lanes. Using a user-equilibrium method, the paper calculates the number of travelers on each route during the peak period and provides a numerical analysis that determines the distribution of travelers for different tolling strategies. It shows that with the right tolling strategy some travelers who initially plan to use the untolled lane during the peak period will change both their routes (i.e., select the HOT lane) and departure times (i.e., depart earlier or later). Using this result, the paper compares static and dynamic pricing strategies and shows that with a dynamic strategy a larger profit can be earned and congestion reduced in the untolled lane.


Author(s):  
Yaping Wang ◽  
Kelly McGuire ◽  
Jeremy Terbush ◽  
Michael Towns ◽  
Chris K. Anderson

In this paper, we propose a new dynamic pricing approach for the vacation rental revenue management problem. The proposed approach is based on a conditional logistic regression that predicts the purchasing probability for rental units as a function of various factors, such as lead time, availability, property features, and market selling prices. In order to estimate the price sensitivity throughout the booking horizon, a rolling window technique is provided to smooth the impact over time and build a consistent estimation. We apply a nonlinear optimization algorithm to determine optimal prices to maximize the revenue, considering current demand, availability from both the rental company and its competitors, and the price sensitivity of the rental guest. A booking curve heuristic is used to align the booking pace with business targets and feed the adjustments back into the optimization routine. We illustrate the proposed approach by successfully applying it to the revenue management problem of Wyndham Destinations vacation rentals. Model performance is evaluated by pricing two regions within the Wyndham network for part of the 2018 vacation season, indicating revenue per unit growth of 3.5% and 5.2% (for the two regions) through model use.


2017 ◽  
Vol 3 (1) ◽  
pp. 66-72 ◽  
Author(s):  
Ian Seymour Yeoman ◽  
Una McMahon-Beattie

Purpose The primary aim of revenue management (RM) is to sell the right product to the right customer at the right time for the right price. Ever since the deregulation of US airline industry, and the emergence of the internet as a distribution channel, RM has come of age. The purpose of this paper is to map out ten turning points in the evolution of Revenue Management taking an historical perspective. Design/methodology/approach The paper is a chronological account based upon published research and literature fundamentally drawn from the Journal of Revenue and Pricing Management. Findings The significance and success to RM is attributed to the following turning points: Littlewood’s rule, Expected Marginal Seat Revenue, deregulation of the US air industry, single leg to origin and destination RM, the use of family fares, technological advancement, low-cost carriers, dynamic pricing, consumer and price transparency and pricing capabilities in organizations. Originality/value The originality of the paper lies in identifying the core trends or turning points that have shaped the development of RM thus assisting futurists or forecasters to shape the future.


Author(s):  
Mahesh S. Raisinghani

Setting the right price has a lot to do with assessing value. Understanding value is a direct result of understanding customers. Intelligent enterprises should use the power of the Internet to collect and process information to rethink their pricing strategy and gear it to customer perception of value. This chapter explores the impact of the Internet on pricing and demonstrates that rather than pushing prices universally downward and squeezing margins, the Internet provides unique opportunities in pricing to enhance margins and generate growth. It expounds on the low-online pricing myth and the dimensions of e-price improvement. Some models of real time and dynamic pricing are explored and implications for theory and practice are discussed.


Author(s):  
Inna LEVYTSKA

The article defines the most effective methods of managing hotel revenues and methods of their use, which in turn will create competitive advantages and make the sale of hotel services stable, and the activity of hotel enterprises more profitable. The concept of Revenue management in the hotel business is disclosed, which is a technology that determines the best price for hotel room on the basis of demand forecasting, that is, the sale of the necessary number to the client at the right moment at the right price. The basic pricing objectives of the hotel company have been developed, which should not be considered separately, but should be in line with the marketing strategy of the enterprise development. Interdependence of the level of loading of hotel rooms from the reduction of prices is determined. The obtained data testify that the price reduction even by 1% requires an increase in loading of hotel rooms by almost 1% to cover losses as a result of income reduction. The goal of the pricing strategy, aimed at achieving the goals as the services to be offered, are proposed, hotels are trying to outdo competitors by maximizing the quality of services. The principles, which should be used by hotel companies that master flexible pricing methods from the point of view of marketing complex: the choice of pricing policy should be closely related to the positioning of the hotel company services; A correlation of the pricing strategy with the definition of the stage of the life cycle, on which the hotel product is located, is very important for the process of formation of prices. The mechanism of calculation of sales prices for hotel services is offered. These approaches should be considered in the pricing policies of the hotel company, depending on the services they provide. The stages of the analysis are determined: market research, hotel product life cycle, task setting of pricing depending on the goals of the hotel company, determination of the marginal range of price fluctuations, determination of the most optimal range of prices. Analysis of prices and range of competitors' services, choice of method of pricing, adjustment of the basic price level, establishment of the final price. The method of "discriminatory pricing" is described and examples of the use of this method are given. The concept of "Price discrimination" is defined, which is a useful tool for smoothing the supply and demand, providing additional income and profit to most hospitality establishments. This method of pricing uses reductions / increases in prices to attract additional customers and revenue without lowering / raising prices for all. A detailed description of the multiplier effect method used in the calculation of prices. The essence of the multiplier method is to calculate the multiplier, which shows how many times the dependent factor (profit) increases or decreases if the independent factor is changed to one. The calculation of the budget based on the multiplicative method in the hotel "Ramada Lviv" was carried out. The number of indicators given in the calculations may increase depending on the specifics of the enterprise. Constant costs are the sum of personnel costs, operating costs, management, depreciation, etc., each of which is considered as an independent factor of impact on profits. Variable costs depend on the volume of goods turnover; therefore, they should include such expenses as additional wages, production raw materials, related and consumable materials. It is characterized by a revenue management system in a hotel that requires a reliable database. A good revenue management system will benefit the hotel and customer. Cost-effectiveness factors (fixed costs of fixed assets and operating costs, variable costs of services) have a completely different range of actions than market-oriented factors (price, cost of services, loading of numbers, etc.). It is determined that for hotels, comparing the influence of various factors on profit, it can be argued that the impact of trade turnover is more significant than the impact of costs. An estimation of the importance of the factors that create the multiplicative effect, which was ranked, depending on their impact on profit. It was found that prices, which are in close connection with all elements of the marketing complex, determine the profitability of the hotel company, its life cycle and financial stability. At the same time, the choice of pricing methods and pricing policies largely depends on the goals and strategies of the hotel company in the selected segment of the market. The proposed mechanism for calculating the sale price of a hotel company is based on a multiplicative method, which includes: the definition of key indicators that affect the profit, including prices; calculation of profit when changing these indicators; estimation of the importance of the impact on the profit of each selected indicator; the choice of the most appropriate variant of profit. The development of market relations in Ukraine and in advanced economies is somewhat similar, therefore, the generalization and dissemination of the best foreign and domestic income management experience based on marketing will improve the efficiency of the hotel industry. Prospects for further research are the development of new strategies aimed at gaining market share, improving hotel services, increasing consumer demand through the interaction of factors of price and quality, promotion of the brand, introduction of new forms of management, including franchising and management contracts, electronic sales of hotels services.


Filomat ◽  
2016 ◽  
Vol 30 (15) ◽  
pp. 4101-4110
Author(s):  
Shuai Ling ◽  
Wandi Hu ◽  
Yongjie Zhang

By using micro-simulation method and the BushCMosteller reinforcement learning model, this paper modeled the behavior of urban commuters departure time choice on a many-to-one transit system during the morning peak-period. Three kinds of typical urban public transport priority policies were studied. Result shows that if we can choose the right time for free public transportation, the pre-peak-free policy will have certain effects on staggering the commuting peak by influencing commuters decision making on departure-time. As for the bus-accelerating policy, it can lower commuters cost, but it is likely to cause more congested volume and add more pressure on the public transit system. The departure frequency increasing policy can partially alleviate the peak congestion problem, but cannot fundamentally eliminate the congestion, instead, it may increase the operating costs. This research is helpful in acquiring a better understanding of commuters departure time choice and commuting equilibrium during the peak period. The research approaches also provide an effective way to explore the formation and evolution of complicated traffic phenomena.


2014 ◽  
Vol 1030-1032 ◽  
pp. 1984-1987
Author(s):  
Ya Ru Dong ◽  
Bin Jia ◽  
Dong Fan Xie

With increasingly fierce competition making price becomes important question relating to the cruise industry. Focusing primarily on three factors, customer arrival rate, ticketing remaining cycles and the remaining tickets, we further improve dynamic pricing method to the market in which we consider random factors and calculate by MATLAB to reflect the impact of three factors on pricing and revenue. It shows that the customer’s arrival rate and the price have the same monotonicity and the more the ticketing remaining cycles are, the lower the price is and the higher the revenue is, and so does the remaining tickets, which is accordance with the actual situation.


2015 ◽  
Vol 29 (4) ◽  
pp. 135-146 ◽  
Author(s):  
Miroslaw Wyczesany ◽  
Szczepan J. Grzybowski ◽  
Jan Kaiser

Abstract. In the study, the neural basis of emotional reactivity was investigated. Reactivity was operationalized as the impact of emotional pictures on the self-reported ongoing affective state. It was used to divide the subjects into high- and low-responders groups. Independent sources of brain activity were identified, localized with the DIPFIT method, and clustered across subjects to analyse the visual evoked potentials to affective pictures. Four of the identified clusters revealed effects of reactivity. The earliest two started about 120 ms from the stimulus onset and were located in the occipital lobe and the right temporoparietal junction. Another two with a latency of 200 ms were found in the orbitofrontal and the right dorsolateral cortices. Additionally, differences in pre-stimulus alpha level over the visual cortex were observed between the groups. The attentional modulation of perceptual processes is proposed as an early source of emotional reactivity, which forms an automatic mechanism of affective control. The role of top-down processes in affective appraisal and, finally, the experience of ongoing emotional states is also discussed.


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