thesis on revenue management

The value of revenue management and pricing in a challenging environment

• Published: 23 August 2022
• Volume 21 , pages 485–486, ( 2022 )

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• Ian Yeoman 1  

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Revenue management and pricing have never been so important as a tool and strategy for predominately hotel and airline businesses since COVID-19. As a journal, some of the best researches examining the impact of COVID-19 on these sectors are discussed in this issue, along with how systems and process have changed.

Demand forecasting is one of the fundamental components of a successful revenue management system. van Leeuwen and Koole ( 2021 ) provides a new model, which is inspired by cubic smoothing splines, resulting in smooth demand curves per rate class over time until the check-in date. Piga et al. ( 2021 ) investigate hoteliers’ short-term recovery strategies during the pandemic. Stemming from management crisis theory and the resource-based view of the firm, this article focuses on two environments differently hit by COVID-19, i.e., London and Munich.

Dalalah et al. ( 2021 ) seek to find the best prices of two different seating classes. Two economy classes are considered for pricing and quantification, where the optimal number of seats of each class is expressed in a closed form and the prices that will maximize the size of sales are computed accordingly. Using a multiplicative demand model and the newsvendor approach, the best discount rates and the optimal number of seats could be found. The model can assist revenue managers to increase the sales via the right selection of the number of economy seats and prices. Torres et al. ( 2021 ) paper aims to examine if the pricing strategy “Pay What You Want” can be the best option for the industry of digital products’ distribution, when compared with other fixed prices policies. Results show that, in some instances, the “Pay What You Want Pricing” strategy yields a greater sales revenue through the reduction of the individual amounts paid, which is counter-balanced by the increasing number of transactions. One of the previously unknown and unexpected impact of COVID-19 is its effect on prices. Rius and Gassiot-Melian ( 2021 ) research estimated how prices in the cruise industry have changed since COVID-19 was declared a pandemic. The research concluded that cruise prices have reduced, on average, by 4.3%, although there are relevant differences between cruise companies, zone of departure, size, antiquity and rating of the ships, and the number of days between the date of capture and the date of cruise departure.

Ancillary revenues and targeted offers for diverse customers have become increasingly relevant in recent years (Babić et al. 2019 ; Warnock-Smith et al., 2017 ). Schubert et al. ( 2021 ) develop a machine learning framework for highly granular customer segmentation, while addressing three potential challenges of data sparsity, curse of dimensionality, and model understandability. The research identifies how customer satisfaction through customized offers and improves pricing decisions through more granular willingness-to-pay estimation. Bento et al. ( 2021 ) paper examines the impact of a mega business event—the Web Summit—on local hotels’ key performance indicators, thus showing that there is a major impact on hotel performance justifying the interest governments and other tourism agencies have in attracting these types of events.

Babić, R.Š., M.O. Ban, and J. Bajić. 2019. A review of recent trends in airline ancillary revenues. EMC REVIEW-ČASOPIS ZA EKONOMIJU 17 (1).

Bento, C., P. Almeida, and J.L. Jiménez-Caballero. 2021. The impact of the Web Summit on hotel performance, the case of Lisbon. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00357-4 .

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Dalalah, D., M. Khasawneh, and S. Khan. 2021. Pricing and demand management of air tickets using a multiplicative newsvendor model. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00368-1 .

Piga, C.A., G. Abrate, G. Viglia, and F. De Canio. 2021. How the hospitality industry reacts to COVID-19: Structural, managerial and tactical factors. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00359-2 .

Rius, J.M.E., and A. Gassiot-Melian. 2021. Has COVID-19 had an impact on prices? The case of the cruise industry. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00362-7 .

Schubert, D., C. Sys, and R. Macário. 2021. Customized airline offer management: A conceptual architecture. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00358-3 .

Torres, A.I., C.L. Barros, A.F. da Silva, and R.J. Silva. 2021. The Pay What You Want pricing strategy applied to digital products: An essay. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00355-6 .

van Leeuwen, R., and G. Koole. 2021. Demand forecasting in hospitality using smoothed demand curves. Journal of Revenue and Pricing Management . https://doi.org/10.1057/s41272-021-00364-5 .

Warnock-Smith, D., J.F. O’Connell, and M. Maleki. 2017. An analysis of ongoing trends in airline ancillary revenues. Journal of Air Transport Management 64: 42–54. https://doi.org/10.1016/j.jairtraman.2017.06.023 .

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Yeoman, I. The value of revenue management and pricing in a challenging environment. J Revenue Pricing Manag 21 , 485–486 (2022). https://doi.org/10.1057/s41272-022-00395-6

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Accepted : 17 August 2022

Published : 23 August 2022

Issue Date : October 2022

DOI : https://doi.org/10.1057/s41272-022-00395-6

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Shioda, Romy 1977. "Restaurant revenue management." Thesis, Massachusetts Institute of Technology, 2002. http://hdl.handle.net/1721.1/28250.

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Wang, Jingbo. "Estimation and optimization in revenue management." Thesis, University of Oxford, 2010. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.522810.

Armar, Nii A. "Cargo revenue management for space logistics." Thesis, Massachusetts Institute of Technology, 2009. http://hdl.handle.net/1721.1/62971.

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Fry, Daniel G. "Demand driven dispatch and revenue management." Thesis, Massachusetts Institute of Technology, 2015. http://hdl.handle.net/1721.1/99548.

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Schmidt, Henning. "Simultaneous control of demand and supply in revenue management with flexible capacity." Clausthal-Zellerfeld Papierflieger, 2009. http://d-nb.info/993813461/04.

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Barz, Christiane. "Risk-averse capacity control in revenue management." Berlin : Springer, 2007. http://dx.doi.org/10.1007/978-3-540-73014-9.

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Terciyanli, Erman. "Alternative Mathematical Models For Revenue Management Problems." Master's thesis, METU, 2009. http://etd.lib.metu.edu.tr/upload/12610711/index.pdf.

Eroglu, Fatma Esra. "Service Models For Airline Revenue Management Problems." Master's thesis, METU, 2011. http://etd.lib.metu.edu.tr/upload/12613490/index.pdf.

Chahar, Kiran. "Revenue and order management under demand uncertainty." Connect to this title online, 2008. http://etd.lib.clemson.edu/documents/1219855173/.

Fernandes, A. T. "Spectrum management for revenue maximisation in DSL." Thesis, University of Cambridge, 2005. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.598991.

Strauss, Arne Karsten. "Optimisation in choice-based network revenue management." Thesis, Lancaster University, 2009. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.543995.

王守廉 and Sau-lim Tim Wong. "Airline revenue management: passenger right and protection." Thesis, The University of Hong Kong (Pokfulam, Hong Kong), 2005. http://hub.hku.hk/bib/B31633183.

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Bratu, Stephane (Stephane J.-C) 1970. "Network value concept in airline revenue management." Thesis, Massachusetts Institute of Technology, 1998. http://hdl.handle.net/1721.1/9939.

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Remy, Detlev. "Revenue management in for-profit higher education." Thesis, University of Surrey, 2014. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.665501.

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