Revenue management, more recently known as margin/profit management, has played a vital role in the travel and transportation industry since the beginning of early 1980. It is a crucial business discipline, and although it may be referenced by a variety of names, most airlines and hotels, and many cruise ferries, car rental and rail operators have a form of revenue or yield management department.
Chances are that you are already exercising Revenue Management in an informal way. You are prepared to offer discounts on departures you consider will not be full to capacity. However, you hold out for the standard fares on those that will. In essence, this is Revenue Management.
Through the gathering and analysis of historic booking data coupled with well-defined techniques, you can formalize this activity into a management discipline that will consistently return substantial, predictable, increased revenues and profits from the sale of your inventory.
Every day that goes by with a departure that leaves with empty space when it was booked full, every space that is sold for less than it could have been, and every customer turned away because of no available space regardless of how much they were prepared to pay, is a lost opportunity for additional revenue and net profitability! Worse still, it is lost forever.
Additionally, you may have non-standard operational requirements which may impact on your ability to easily manage inventory:
- Flexible capacities or crewing levels impacting on Safety Capacity.
- The ability to substitute different gauge equipment based on demand
- Constraints on a resource type which is not directly related to your managed inventory
- Inconsistent occupancy ratios of cabins to passengers, or passengers to vehicles.
The RTS Profit Optimization Solution™ is an integrated solution of business case analysis, software-as-a-service, Business Intelligence tools, and professional consulting. It reaches across your business units to synchronize multiple functions, processes, and information to achieve your company’s profit goals. When fully implemented, the RTS Profit Optimization Solution™ focuses your enterprise to achieve strategic, tactical, commercial, financial, and operational objectives.
The value of Profit Optimization results from applying advanced forecasting mathematics to complex business data, with visual analysis of the results, based on your key performance indicators (KPI). This advanced level of management decision support enables a timely business response, higher profitability, and lower costs. Additionally, the RTS Profit Optimization Solution™ is knowledge-based, and makes extensive use of visual analytics, differentiating it from traditional revenue management products.
The innovative RTS approach to Profit Optimization delivers industry-specific solutions, optimized for individual client needs based on their business case analysis, and performance measurement requirements.
By disciplining inventory and pricing tactics, you initiate a systematic approach to maximizing revenues and profitability.
The price sensitive RM solution will enable airlines to optimally set prices resulting in the following benefits
- Incremental revenue of up to 10%, the majority of which will go directly to the bottom line.
- Enhanced productivity.
- Ability to identify and focus on critical flights
- Minimal startup costs You control the level of investment over time based on your budget, your needs, and the benefits you achieve.
- Through a phased implementation approach, the risks you may perceive in changing your business operations can be managed in direct proportion to your increasing acceptance that Revenue Management is for you.
Can you afford NOT to do this?