Carnival Optimizes Revenue and Inventory Across Heterogenous Cruise Line Brands

Carnival Corporation & plc identified the need for a cutting-edge revenue management system; however, existing solutions from the airline and hospitality industries were not compatible with the idiosyncrasies of the cruise domain. As such, the company partnered with revenue analytics to build a complete revenue and inventory management system to meet its requirements. Yield optimization and demand analytics (YODA) is a system that leverages a unique quadratic programming model to jointly determine cruise prices and allocate cabin inventory to multiple cruises (e.g., 14-day and 7-day lengths) offered simultaneously on a given ship. The optimization inputs come from several machine learning algorithms that predict demand. YODA combines these algorithms with an elasticity model derived from an exponential curve to represent the unique price-sensitivity behavior observed in the cruise industry. The system generates millions of price recommendations each day and has been used to price voyages on 65 Carnival ships, approximately one quarter of the ships in the entire cruise industry, since December 2017. During A/B testing, YODA generated a 1.5%–2.5% incremental uplift in net ticket revenue, which is a significant revenue increase because Carnival was a Fortune 300 company in 2019.

Revenue management systems as symbiotic analytics systems: insights from a field study

Revenue management is a complex operational planning process involving predictive and prescriptive analytics. As real-world implementations strongly rely on the joint outcomes from both algorithms and analysts, we consider the revenue management system as an example of symbiotic analytics systems. This paper presents insights from a field study observing a natural experiment in revenue management. As a firm updates its automated revenue management systems, it also updates the related processes and the corresponding organizational structure. We use this opportunity to examine the multilevel use of symbiotic analytics systems based in a field study and explore the implications for the design of future systems. Specifically, we identify two different perspectives on the revenue management process. In the functional view, jobs are organized sequentially with a high degree of system-oriented specialization. The process view organizes jobs in a parallel structure, differentiating two perspectives on demand. Depending on what view the firm implements, different structural fault lines turn the communication and training of analysts into keystones of the planning process. Furthermore, as we point out, even implementing more sophisticated algorithms and redesigning planning processes and organization do not seem to reduce the relevance of human analysts.

E-COMMERCE AND CHALLENGES TO CONTROL

The topic of e-commerce has become more and more relevant in the last few years. With the advancement of technology and the ever-increasing power of the internet, many people choose this type of presentation instead of the classic “physical” store or office. Of course, this has its advantages: saving a lot of costs, unlimited market, saving time in endless shopping, and more. With the ever-expanding Internet market, online shopping and retailers offering similar types of services have also become more frequent. Tax authorities are increasingly paying attention to this growing industry. In the tax practice, there are already a large number of merchants who have been severely sanctioned for failing to comply with legal requirements for online business. With regard to the distance selling of goods and services / via e-commerce or otherwise / within the EU there are specific provisions in the European VAT Directive creating obligations to register and charge VAT in the country of consumption. Member States tax administrations are also looking for new and more effective digital business control methods to reduce non-taxation and to increase tax collection. That is why a number of countries are introducing electronic audits / audits / on the basis of enhanced exchange of information and control in real time, such as the new requirements of the H-18 Regulations for cash registers and the introduction of CPRMS / Commercial Property Revenue Management System. The topic presented on the need and application of electronic controls and audits has been particularly relevant in recent years globally. It is linked to the rapid pace of e-commerce development and the increasing profits in the sector at the expense of tax avoidance. This is precisely where the research proves the need to apply and develop control over e-commerce, in conclusion, it can even be assumed that the organization and implementation of electronic control / audit is even delayed.

A Study of Revenue Management of Tirumala Tirupati Devasthanam: Management Control of Religious Trust in India

Management control is associated with the institutionalization of trust inside an organization. It is a control of economic and administrative functionalities like revenue management, future plans to expand income, target-setting as well as public facilities and amenities. Pilgrimage tourism is a fast-growing service industry in modern India, and the majority of them are Hindu because more than 80% of Indian people believe in Hindu. Tirumala Tirupati Devasthalnam (TTD) stands to be the biggest religious trust in India. On this background, this study will clarify the two aspects of the management control of TTD: (i) revenue management and commercial profit,(ii) economic and business impact to the local community. Based on the secondary data, this study focused on revenue management of TTD. First, the author explored that TTD has created a religious market around the world. The excellent management control of TTD with the help of IT in the present period changed into one of the richest temples of Hindu religion. The trust started the pricing of religious objects; changes in marketing policies, diversification strategies, and use of IT lead its success. Second, it explains the idea that the economic impacts and revenue management of pilgrimage tourism with the example of the TTD. Due to the increasing number of pilgrimages in the area, the number of population is increasing, and social infrastructure is also developing. Based on the study result, this study suggests that to establish a new revenue management system/team.

Enhancing the accuracy of revenue management system forecasts: The impact of machine and human learning on the effectiveness of hotel occupancy forecast combinations across multiple forecasting horizons

Reporting on three separate studies in the context of hotel revenue management systems, this article explores the interaction between two established methods of accuracy enhancement—forecast combinations and learning. In line with theoretical considerations, our empirical investigation suggests that as learning occurs, the capacity of combinations to improve forecast accuracy diminishes in scenarios where the combined elements are independent of each other. Conversely, in the more realistic typical scenario of user overrides of system forecasts, where the elements of the combinations are dependent, the learning-driven efficacy of forecast combinations appears to vary across forecasting horizons. We find no impact of learning on combination effectiveness in the shorter forecasting horizons of 21 days or less and a surprisingly positive impact in the longer horizons. This counterintuitive finding has important practical implications for hotel revenue management practices.

REVENUE MANAGEMENT IN HOTEL BUSINESS

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.