Travel, Tourism & Hospitality
Pricing Challenges and Opportunities
The travel industry which encompasses airlines, hotels, tour-operators, car rentals, railways, cruise lines, and ferries is a key sector of application for Intelligent Pricing.
In such rapidly changing and competitive markets companies have applied differential pricing (based on customer segment and location) for many years and adapt them based on competitive actions. Furthermore, companies in the travel industry are selling through Global Distribution Systems - the GDS - (Sabre, Amadeus) which has led them to automate pricing decisions.
Managing hundreds of prices is highly complex and cannot be handled without specific tools. This explains why travel is the homeland of yield management techniques. Airlines first applied these techniques in1985 in order to maximize the revenue of each flight by forecasting demand at the fare class level and then calculating the optimal allocation of seats at each fare class based on the price and the probability of selling each seat. More sophisticated yield management systems were developed in the 90' to dynamically calculate the opportunity costs (bid price) of each resource (airline leg, room category) in order to optimize an entire set of products at the same time.
Today, the travel industry is facing additional pricing challenges.
Benefits of Open Pricer technology
Open Pricer provides tools that assist travel and tourism enterprises in optimising their profitability through precise pricing decisions. These are some of the advantages provided by our Intelligent Pricing technology :
- optimization of global and recurring contracts with key accounts (tour operators, travel agencies, corporate accounts)
- customer focused (instead of product centric) yield management
- follow-up of the performance of thousands of publish fares/rates, notably through web sites
- negotiation of groups based on a better estimate on their willingness to pay
- optimization of advertising campaigns and promotions
