Real-Time Revenue Management

One of the things that we have been hearing a lot about lately is the ability for real-time optimization of a single departure or a group of departures.  This has many benefits for those departures that tend to get a significant number of bookings in the last few hours prior to departure – especially in the cargo and passenger rail industries.  The objectives of real-time revenue management are two-fold:

n  React with minimal latency to dynamically changing market conditions.

n  Especially useful when significant booking activity/schedule changes occur during the day and carriers cannot afford to wait for nightly file updates and processing

RTS is currently reviewing many options on how best to approach real-time revenue management.  One approach is:

n  The inventory control system senses change in booking activity and sends alerts to the revenue management application based on user defined thresholds, i.e., cancellations, bookings greater than projected demand, etc.

n  The revenue management application gets the latest booking, cancellation, schedule change data in real time from the central reservations system (inventory refresh) and automatically optimizes these departures and sends updated allocation levels back to the reservation system.

n  Two-way real time interface between the central reservation system and the revenue management application would need to be developed to facilitate dynamic data exchange between the systems.

The pros to implementing real-time revenue management consist of:

n  Boosts the bottom line by making optimal decisions based on real time information minimizing lost revenue opportunities.

n  Improves analyst productivity by reducing rework on a number of stale or invalid controls.

n  Automatically identifies departures that need to be re-optimized and eliminates the need for the analyst to continuously monitor changes in market conditions.

The downside of implementing the above is:

n  May not be worth the investment if market behavior is relatively stable and predictable

n  If thresholds are not defined accurately, it may lead to uncontrollable number of alerts being sent from the Central Reservation System to the revenue management application impacting performance.

We believe that the ultimate approach would be a combination of nightly processing and the ability for the system to send alerts so that the analyst can actively review those departures that are falling outside of the user defined threshold parameters.

RTS values your input and thoughts and the enhancements to our products.  Leave a comment and let us know your thoughts.

From all of us at RTS we want to wish you a very Merry Christmas and a Joyous New Year. 

Robert L. Harris, Jr.

Senior Solutions Consultant

Hyperloop

It is the latest buzzword in the travel and transportation industry where passengers can travel between 2 major cities which are less than 1000 miles apart within 30 minutes, at a speed close to 800 mph. Another one of Elon Musk’s newest inventions and an extremely powerful, practical one which has become a jaw dropper in the Travel and Transportation industry.  Existing conventional modes of transportation of people consists of four unique types: rail, road, water, and air. These modes of transport tend to be either relatively slow (i.e., road and water), expensive (i.e., air), or a combination of relatively slow and expensive (i.e., rail). Hyperloop is a new mode of transport that seeks to change this paradigm by being both fast and inexpensive for people and goods. A mode of transport that is a cross between the concorde, a rail gun and an air hockey table.

When it will become a reality is yet to be seen, but for now the authors are calling this an “Open Source Project”. It has an open design concept just like Linux did decades ago and is now a reality. The first version of this design involves passenger and the second will be passenger and vehicle.

In lines with the Hyperloop, a more comprehensive project is the Aqua=Terra T.W.I.N.S. (Trans-Web Infrastructure Network System) projects (aquaterraplanetaryholdings.us and invention.net/aquaterra) that not only provide for an advanced transportation system, it also includes a complete self-sustaining format that links, via sub-surface Tubes, land (Terra) and sea (Aqua) Stations to form an international / single-standard web system.

 We at RTS, love to research and analyze any new trends that will help companies in this space integrate profit optimization and revenue management into their existing business processes and systems. Since we work with both Passenger and Cargo, it is very exciting to learn about the specs that the Hyperloop has presented to enable them to make use of our wide product range.

The Hyperloop concept is the first of its kind to ever to be created and there is no doubt that above a very sophisticated software system/s that handle the data, visuals, reservation, financial, reporting, there is an important layer of software which is a profit enhancement system that will that make sure there is benefit and optimized use of the seats/cargo space within the Hyperloop.

Some questions that will linger on for now on our minds - What is the capacity? If it cannot meet the demand will the prices go up? Is there is a long wait time to use the Hyperloop pods, will people find themselves having to take an alternate mode of transport?

The move toward higher speed, better service, cheaper travel, and something less environmentally polluting, is going to happen — it's the wave of the future.

Deeshi Gandhi

Technical Manager