Just You launches travel trade solo experience

Just You launches travel trade solo experience

Friday, 21 October 2016 14:00

Just You h...

Spontaneous people are happier according to Snaptrip survey

Spontaneous people are happier according…

Friday, 21 October 2016 11:00

Spontaneous people are often believed to lead more exciting or glamorous lifestyles and a new study has confirmed that they are happier in all aspects of their lives.

Top Brighton attractions on Combi-Saver tickets for half term

Top Brighton attractions on Combi-Saver …

Friday, 21 October 2016 09:00

Visitors to Brighton this October half term can save up to 20% on its top three paid-for attractions with combination tickets now available for British Airways i360, SEA LIFE Brighton...

Free cabin upgrades with Cosmos Tours

Free cabin upgrades with Cosmos Tours

Thursday, 20 October 2016 14:00

There still’s time for agents to book a Croisieurope river cruise for their customers with a free cabin upgrade on a range of river cruises throughout Europe, when booked with...

Last minute autumn breaks available at Haven

Last minute autumn breaks available at H…

Thursday, 20 October 2016 11:00

Agents can still give their customers a last minute family break this autumn from £99 when booking a Haven holiday between now and November 5.

Skiers urged to head east for best piste costs reveals new report

Skiers urged to head east for best piste…

Thursday, 20 October 2016 08:00

Cash-conscious skiers can avoid the slippery slope of higher prices for their annual downhill trip by heading to ski resorts in Eastern Europe.

Design an anniversary poster for DFDS competition

Design an anniversary poster for DFDS co…

Wednesday, 19 October 2016 14:00

Ferry operator, DFDS, is putting out a call to professional and amateur artists to create a poster that will be used in their 150th anniversary celebrations this year.

Savings on worldwide adventures with Explore

Savings on worldwide adventures with Exp…

Wednesday, 19 October 2016 11:00

Explore has launched a new collection of worldwide adventures with a launch offer of up to 10% discount on all new trips booked by November 7.

New route to Seattle makes it one to watch for 2017

New route to Seattle makes it one to wat…

Wednesday, 19 October 2016 09:12

Seattle is expected to be one of the fastest growing US destinations for UK travellers next year with a Virgin Atlantic direct non-stop daily flight launching March 2017, new hotel...

Air Transat launches 2017 programme with increased connections across Canada

Air Transat launches 2017 programme with…

Tuesday, 18 October 2016 14:04

Air Transat has expanded its programme of flights from the UK to Canada with increased capacity and connections for travel in 2017.

Oceania Cruises reduces single supplement fares

Oceania Cruises reduces single supplemen…

Tuesday, 18 October 2016 14:02

Oceania Cruises has launched a reduced single supplement promotion for solo travellers, with guests offered single supplements fares from 25% on seven itineraries, booked before December 31.

Mall of America welcomes arrival of MythBusters

Mall of America welcomes arrival of Myth…

Tuesday, 18 October 2016 14:00

Running throughout autumn until January 15, 2017, visitors can ignite their curiosity and discover whether they can really huff and puff to blow a house down; if running in the...

Emirates to launch new daily service to Fort Lauderdale

Emirates to launch new daily service to …

Monday, 17 October 2016 11:00

Emirates has announced that it will launch a daily service between Dubai and Fort Lauderdale-Hollywood International Airport, on December 15, serving the South Florida area, including Fort Lauderdale, Miami and...

New tours in UK & Europe from Back-Roads Touring

New tours in UK & Europe from Back-R…

Monday, 17 October 2016 08:42

Small group tour specialist Back-Roads Touring has launched its summer 2017 brochure to reveal a unique line up of new itineraries in Switzerland, Scandinavia, the Baltics, France, Iberia and Russia.

Star studded cruise line up from CMV in 2017

Star studded cruise line up from CMV in …

Friday, 14 October 2016 10:16

Cruise & Maritime Voyages has announced five star-studded cruises for 2017 following the arrival of its new main brochure.

Non-stop flights to Manchester from SIA

Non-stop flights to Manchester from SIA

Friday, 14 October 2016 10:11

Singapore Airlines will fly non-stop between Singapore and Manchester from October 30 as part of its northern winter schedule.

Bill_Kotrba_Headshot"You are only as smart as your dumbest competitor" – this truism cuts across every industry and has stood the test of time. When one competitor panics and cuts prices, it often leads to a downward price spiral whereby others are compelled to cut prices or risk losing market share and revenue. Low prices are great for customers but for businesses, they are often the path to mutually assured destruction and long-term losses.

The travel industry is one of high fixed-costs, low marginal-costs and price transparency – making it fertile ground for price wars. The thinking is that it's better to fill up all seats - at a low price - than not at all. During a recession, the situation becomes more desperate, as airlines large and small slash prices in an attempt to stimulate demand or gain market share.

The most recent recession was an exceptional one for the travel industry. For almost a decade, online travel agencies have been the engine of "instant price transparency," allowing customers and airlines to quickly and easily see every competing hotel and price for any stay night. The recession, however, hit as mobile devices were ushering in a new era of hyper-transparency. For the first time, the lowest prices could quickly find customers via social media channels and instant messaging to mobile devices. Customers can now receive instant alerts when prices change or go below a certain level. As such, it has never been easier to start a travel industry price war, and it's never been harder to recover from one.

In 2009, with very few sold-out flights, traditional revenue management systems were adding very little value. When demand dropped so low, there were very few opportunities to close out lower rates and charge more for the remaining rooms. Revenue management systems have evolved around managing and allocating inventory to an existing set of prices, not managing the prices themselves. When airlines are expected to have empty seats, revenue management systems keep the lowest rates open for sale right up to a flight departure. If the lowest rate is driven even lower to match a competitor, a traditional revenue management system may recommend keeping the lower rates for sale indefinitely, especially during times of low demand.

When the dust settled in 2010, one thing was evident: the revenue management systems that evolved pre-Internet and before hyper-transparency were not delivering the one vital piece of information – an optimal price recommendation. Having managed through the recession with tools designed to be effective only during high demand, airlines looked to revenue management software providers for a different approach.

Making a price recommendation is all about understanding the underlying elasticity or inelasticity of demand. How much money is a customer willing to pay for a flight, and what is that elasticity relative to competitors' prices? If a competitor's rate for a return flight is £160, could a rate of £180 sell out? Or should prices drop to £120 to increase the likelihood of a sell out?

Price optimisation, which represents the future of revenue management, applies advanced price-elasticity estimation techniques combined with real-time competitor price data. Elasticity algorithms are applied to an airline's historical demand along with data for historical pricing. Combined with bookings on-hand and a forecast of demand yet-to-come, pricing and revenue management systems can now make real-time daily price recommendations that maximises revenue.

For the first time, a pricing and revenue management system can recommend not to engage in the battle. This new competitive posture is a huge advantage for airlines of all sizes in the world of hyper-transparency in pricing. Certainly there will always be price wars, but with wide adoption, price optimisation can help avoid deep and prolonged price wars that cut across seasons and markets, destroying future revenue as prices take months or years to recover.

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