Revenue Management

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Revenue Management, also commonly known as Yield Management, is a strategic approach that aims to maximize revenue. It applies particularly to business areas whose products are only available for sale until a certain deadline, this deadline being generally determined by the very nature of the product.

What is Revenue Management?

Revenue Management consists of:

  • predict the demand of potential consumers for a product
  • optimize the availability of the product at the indicated demand
  • optimize the price of the product according to supply and demand

Revenue Management is often reduced to the following equation:

sell the right price at the right time at the right place to the right customer

This equation is solved by the optimal allocation of the number of units available for sale per tariff quota.

In practice, revenue management covers a set of strategies and techniques aimed at maximizing a company's income (or even profits)

Total Revenue Management (TRM)

Today, practice is evolving towards Total Revenue Management (TRM), a more advanced conception that looks at all potential revenue sources that make up the value chain of an organization, including advanced pricing methods, segmentation strategies, distribution principles and taking into account ancillary income and even variable costs.

Why use revenue management?

The main reason for using Revenue Management is the search for the best optimization of sales prices in relation to an economic situation, ie the achievement of maximum income.

For certain industries, such as commercial aviation and the hotel industry, the implementation of Revenue Management has become essential when companies offer large quantities of units for sale, and/or when they operate on markets competitive.

Experts estimate that the application of revenue management in a compatible industry would make it possible to achieve an improvement in turnover of between 3% and 8%. But in practice, this greatly depends on the maturity of the organization to integrate revenue management into the heart of its value chain, and the degree of adoption by competitors of similar techniques. Indeed, a company that uses revenue management techniques on its own would have to educate its market about the implementation of different price levels for the same product, and would be forced in a period of low demand not to be able to deploy the entire range of revenue management tools to remain competitive with its competitors.

The proven financial successes of using revenue management

  • In 1987, American Airlines and its technology partner Sabre reported increasing the company's total revenue by 2% by implementing a new revenue management computer system called the virtual nesting O&D system.
  • In 1989, they claim that adopting the bucket management technique helped increase their turnover by 0.4%
  • Over the period 1989-1991, American Airlines declared having generated 1.4 billion dollars of incremental income thanks to the systematic application of the precepts of Revenue Management

Revenue management processes

Main revenue management processes are:

  • Demand forecast
  • Inventory control
  • Optimization
  • Market segmentation
  • Pricing strategy
  • Revenue integrity
  • Performance monitoring

Demand forecast

Demand forecasting is the process of using predictive analysis of historical data to estimate and predict customers’ future demand for a product or service. Revenue management is the art and science of predicting those swings in demand and responding in a way that maximizes the business’s revenue. By using demand forecasting, a business can make better-informed supply decisions that estimate the total sales and revenue for a future period of time.

Inventory control

Inventory control is the process of keeping track of units that are sellable, already booked, and available for sale. Inventory control enables the maximum amount of profit by allocating strategicaly units available for sale in tariff buckets. In revenue management, inventory control strategies limit the number of inventory units sold at discounted fares so that a revenue-maximizing balance between average revenue per inventory unit sold and high yield sales is achieved.

Optimization

Optimization is the strategic management of pricing, inventory, demand and distribution channels to maximize revenue growth over the long term. Optimization uses demand modeling, demand forecasting, pricing optimization, consumer behavior predictions, and other activities to ensure the right products are sold to the right customers at the right time and for the right price. Optimization also involves managing acquisition, retention and expansion strategies to improve revenue in a substainable way.

Market segmentation

Market segmentation is a marketing term that refers to aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action. Market segmentation techniques are critical for successful revenue management as they allow firms to identify customers with different willingness to pay, provide a rationale for why different customers are charged different prices, and prevent opportunistic buy-down behaviour. Market segmentation allows businesses to understand their customers better and tailor their offerings and marketing efforts to specific segments.

Pricing strategy

A pricing strategy is a model or method used to establish the best price for a product or service. It helps you choose prices to maximize profits and shareholder value while considering consumer and market demand. Pricing strategy also involves the concepts of optimal price and promotion pricing. Pricing strategy requires developing a long term plan that considers various factors such as costs, competitors, customers, channels, and value proposition.

Revenue integrity

Revenue integrity is the process of ensuring that revenue is accurate in coding and charge capture, that it is reasonable for services provided, and that it complies with tariff rules determined by the organization or its stakeholders. Revenue integrity also involves recovering lost revenue due to factors such as no-shows, cancellations, overbooking. Revenue integrity helps reduce the risk of fraud, noncompliance, payment issues, and minimize the expense of fixing problems downstream with claim edits

Performance monitoring

Performance monitoring is the process of setting organizational goals, monitoring the actions and processes used to achieve those goals, and creating ways for managers to achieve those goals more effectively. It requires collecting and analyzing data, looking closely at key performance indicators (KPIs), identifying areas for improvement, and implementing changes.

This should be considered a cycle:

  1. I define a goal
  2. I implement an action
  3. I collect the results of this action
  4. I analyze the results and put them into perspective of the initial objective
  5. I enrich my knowledge center about performance triggers
  6. I start again at step 1 by reproducing the same action, or by implementing a corrective action, or any other action

What is needed to apply revenue management?

First of all, the products or services marketed should have the following characteristics:

  • A product offer with a relatively fixed capacity that is known in advance
  • A demand for the product that cannot be predicted with certainty
  • A product that cannot be consumed in advance, but can be reserved in advance
  • A perishable product whose stock value suddenly drops to zero just after the last time it was on sale
  • It is legally, ethically and technically possible to sell the same product at different prices depending on the consumer profile, and/or the distribution channel, and/or the degree of anticipation of the purchase

And then it is recommended that the sale and distribution of these products is supported by:

  • An inventory method to manage stocks, ideally computerized
  • A demand forecasting system, usually integrated into a Revenue Management System (RMS)
  • Fare grids stored into database and managed by a pricing engine
  • Price optimization logics, processed by algorithms
  • Data about customer behavior and competitor fares
  • A market segmentation strategy
  • Connectivity to distribution channels
  • Revenue integrity processes
  • Reporting data insights to measure performance

Who uses revenue management?

All sectors of activity meeting the characteristics set out in the previous section can in theory apply revenue management. But not all of them do it, at least with the same intensity, and some industries that only partially meet these characteristics try to implement certain concepts of revenue management.

Precursor business sectors in the adoption of Revenue Management

These industries have almost systematically used all or part of revenue management techniques for several decades:

Aviation

  • Legacy Airlines
  • Low-cost carriers
  • Air Freight

Hospitality

  • Hotels
  • Motels
  • Campings, Campsites
  • Seasonal rental

Medias

  • TV advertizing
  • Advertising display

Railway

  • Train compagnies

Business sectors that are gradually converting to Revenue Management

Some companies in these sectors of activity use revenue management, without it being a systematic practice:

  • Cruises
  • Ferries
  • Tour operators
  • Parkings, Car parks
  • Bus networks
  • Theme parks
  • Events, Concerts, Venues, MICE
  • Conferences, Fairs

The sectors of activity that could tomorrow use revenue management

Innovative companies in these sectors of activity are currently interested in revenue management to increase their competitiveness:

  • Restaurants
  • Network management companies (Rail)
  • Public transportation

What are the origins of revenue management?

If we can trace the use of the terms Yield Management and Revenue Management to the second half of the 20th century, it is not possible to affirm that it was born at that time.

In reality, since the application of Revenue Management techniques is linked to the universal laws of price fluctuation between supply and demand, it can reasonably be assumed that humans began to apply such techniques from very ancient times.

Yield management was successfully adopted by the airline industry after deregulation in the late 1970s. It is a profit-maximizing strategy that involves adjusting ticket prices based on demand and seat availability.

Revenue management appeared in the 1980s as an extension of yield management. This is a more comprehensive approach that takes into account not only revenue generated from ticket sales, but also revenue from complementary services, such as baggage, meals or upgrades.

Its modern version really developed in the 1950s in the aviation sector which was in full development, under the combined action of three determining factors:

  1. The derugalisation of the industry in the USA, then in the rest of the world: traffic rights, autonomy in setting prices, freedom to display GDS (Global Distribution System).
  2. The development of computer systems
  3. Increase in the number of seats offered on board aircraft

The deregulation of air transport

Tariff derugalisation

In the origins of air transport, airlines could not open and operate lines as they wished. They had to hold traffic permits. If this is still the case at the international level, most regulatory constraints have been lifted for domestic flights in many countries, even within economic groups such as the European Union. Similarly, the tariffs applicable to air passenger transport were regulated, particularly in the United States.

In the United States, 1925 inaugurated deregulation in the airmail freight sector with the Kelly Act.

The following decades were governed by price controls by the federal authorities, with increasingly wide margins of maneuver being able to be negotiated by the airlines, in particular from the 1960s. But it was not until 1978 that federal controls on prices started to be abolished with the Airline Deregulation Act, paving the way for free pricing. This is how the airline company American Airlines became interested in advanced Yield Management techniques in 1979, which would later be called Revenue Management.

In 1983 the total deregulation of prices is recorded, which allowed the development of Revenue Management, and more generally of air transport.

Traffic derugalisation

The 1990s saw the concept of Open Skies develop which ushered in strong growth in the airline industry, and also in connecting flights, which necessitated pushing the concepts of Revenue Management further forward, with the concept of revenue optimization across a network.

Distribution systems deregulation

In 2004, another stage in the deregulation of the GDS industry in the US took place, notably with the end of:

  • The ban on bias displays
  • The obligation for an operator to provide the same level of service across GDSs
  • The end of the obligation of full content agreements (which does not however prevent the GDS from imposing it in private contracts with their customers)

The development of computer systems

IT systems play a key role in the implementation of yield and revenue management strategies, as they allow the collection, analysis and use of data on customer behavior, competitor prices, demand forecasts, operational costs and capacity constraints. Thanks to computer systems, companies can dynamically adjust their prices and inventory to maximize their profitability while taking into account the needs and preferences of customers. Computer systems have also allowed companies to develop new distribution channels, such as websites, mobile applications or online agencies, which offer more flexibility and personalization to customers. Computer systems have therefore contributed to development and innovation of revenue management.

Computer systems have evolved over time to support yield management and revenue management in the airline industry. For example, early systems relied on simple rules and historical data to calculate optimal fares. Current systems use advanced algorithms and real-time data to optimize prices and inventory based on market conditions and customer behavior.

The hotel industry began to adopt yield management in the 1980s, inspired by the success of the airline industry. Revenue management became common practice in the hotel industry in the 1990s, with the emergence of new online distribution channels and increased competition between hotels. Computer systems have enabled hoteliers to collect and analyze data on demand, guest segmentation, competitive positioning and financial performance.

The increase in the capacities of the leisure industry

The number of seats on board aircraft has increased over the years to meet growing passenger demand and to optimize capacity utilization. This has led to greater complexity in airline revenue management, which is all about maximizing the profit generated by selling each product to the right customer, at the right time and at the right price.

The same phenomenon has appeared in the hotel industry, boosted by the growth of the middle classes, and by the increase in transport capacity, particularly in the air:

  • 1958: Boeing 707-100, 110 seats (most used configuration)
  • 1971: Boeing 747-100, 366 seats
  • 1997: Boeing 777-200ER, 301 seats
  • 2007: Airbus A380-800, 525 seats

Yield Management

The term Yield Management was first used, in the context of this wiki, by American Airlines in the late 1970s, probably by one of its employees, Robert Crandall. This term then spread to other airlines, and was then widely taken up by many industries, especially the hospitality industry.

Today, the term Yield Management is a strong marker of the leisure and transport industry, although it is gradually being replaced by the term Revenue Management. The differences between the two terms are debated, with some seeing Yield Management as a rudimentary version of Revenue Management as it is practiced today, while others use the two terms interchangeably to designate the same discipline.

 Anyway, it is commonly accepted that the use of the term Yield Management predates that of Revenue Management.

Revenue Management

The term Revenue Management meanwhile, in our context, was born in the mid-1980s in the airline industry, and has since spread to other sectors of activity, particularly hospitality, to the point of sometimes disappearing the original term Yield Management.

What are the specificities of revenue management in the airline industry?

Revenue management in the airline industry can be defined as the strategy and systems put in place by an airline to maximize its revenue while improving the customer experience to ensure customer loyalty. It involves controlling inventory, forecasting demand and responding to competitors' prices in the market. Although the principles of revenue management are identical to all types of airlines, the methods implemented differ to adapt to the specificities of each business model. There are different types of airlines that have specificities in their revenue management, such as traditional airlines, low-cost airlines, charter airlines, private jets and cargo airlines.

Legacy airlines

Legacy airlines are those that offer full passenger services, such as meals, checked baggage and loyalty programs. They usually have extensive networks of destinations and partners. Legacy airline revenue management relies on the use of advanced technologies to adjust prices based on demand and competition. They also use price restrictions, such as advance purchase dates or minimum stays, to segment customers and optimize inventory.

When legacy airlines operate connecting networks, very specific concepts are used to maximize network revenue, such as the so-called "O&D" inventory systems. Their interline connectivity to other airlines, or even to other modes of transport such as train or bus, are subject to specific optimization techniques, such as bid price exchange or revenue prorating.

Also, the important part that their loyalty program can take in their business model involves displacement cost considerations when it comes to providing seats against miles, as it can take the place of a paying passenger.

Typically, a legacy airline caters to a broader spectrum of potential consumers, which implies significant market segmentation granularity. Similarly, it will seek to distribute its offer to as many intermediaries as possible, sometimes even having to pay high commissions.

Over the past two decades, low-cost airlines have challenged the business model of legacy airlines, and led them to unbundle their product, for example by offering checked baggage as an option. Their turnover generated by revenue ancilaries now represents a growing and significant share of their total revenue, and they are only just beginning to apply revenue management concepts to ancilaries.

Low-cost

Low-cost airlines are those that offer limited services to passengers, such as unassigned seats, carry-on baggage only, and additional charges for optional services. They generally have restricted networks of destinations and partners.

Low-cost airline revenue management relies on offering attractive fares to drive demand and customer retention. They also use ancillary revenues, such as fees for checked baggage, meals or preferential seats, to increase the average revenue per passenger. They must also manage their costs effectively to maintain profitability. They market extremely low prices, well below their cost price, for a limited number of seats, in order to promote the destinations of their network.

Airlines revenue management KPIs

Revenue management KPIs are key performance indicators that measure how well an airline is managing its revenue potential. They help airline managers to forecast demand, optimize inventory, and monitor and respond to competitors’ prices. Some of the most important revenue management KPIs in the airline industry are:

  • RASK (revenue per available seat kilometer): The average revenue earned per seat flown by one kilometer. It is calculated by dividing total revenue by total available seat kilometers (ASK).
  • CASK (cost per available seat kilometer): The average cost incurred per seat flown by one kilometer. It is calculated by dividing total operating expenses by total ASK.
  • Load factor: The percentage of seats that are occupied during a flight. It is calculated by dividing revenue passenger kilometers (RPK) by ASK.
  • Yield: The average revenue earned per passenger flown by one kilometer. It is calculated by dividing total passenger revenue by RPK.

What are the specificities of revenue management in the hospitality industry?

Yield management is a pricing strategy commonly used in the hospitality industry to generate maximum revenue from a perishable inventory, such as hotel rooms. Some of the specificities of yield management in the hospitality industry are:

  • It involves forecasting demand and supply, segmenting customers based on their willingness to pay, and adjusting prices accordingly.
  • It requires constant monitoring of market conditions, competitors’ actions, and customer behavior3.
  • It relies on tools such as revenue management systems (RMS), rate shoppers, and channel managers to collect and analyze data, optimize prices, and distribute them across different channel

Hospitality revenue management KPIs

Revenue management KPIs are key performance indicators that measure how well a hotel is managing its revenue potential. They help hoteliers to make data-driven decisions, optimize prices and availability, and increase profitability. Some of the most important revenue management KPIs in the hospitality industry are:

What are the specificities of revenue management in the cruise industry?

Revenue management in the cruise industry is a practice that aims to optimize the turnover and profitability of cruise lines by adjusting prices and capacity according to demand and competition. Revenue management in the cruise industry has specificities compared to other tourism sectors, such as:

  • The variable duration of trips and the diversity of cruises
  • The difficulty of identifying similar products from the competition
  • Taking into account additional expenses on board
  • Taking into account the lifeboat capacities of each vessel
  • The level of consolidation of operators in the sector
  • The number of turnkey IT solutions available
  • The slow recovery of the post-covid sector

Cruise revenue management KPIs

KPIs (key performance indicators) of revenue management in the cruise industry are measures that help to assess and optimize the financial performance of cruise lines. There are different types of KPIs, and the most common are:

  • Total revenue
  • Occupancy rate
  • Revenue per passenger
  • Revenue per day
  • Revenue per distribution channel
  • Cost per passenger

What are the specificities of revenue management in the railway industry?

A railway company applies revenue management to optimize its turnover and the filling of its trains. Theoretically, the rail transport industry can use yield management for its passenger and freight activities, but in practice we see that revenue management is generally limited to passenger traffic, rather on long-distance routes. A railway company applying this discipline has a team of revenue management analysts who are responsible for defining and implementing the yield strategy. The yield strategy consists of adapting ticket prices according to demand, competition, events, promotions, etc. A railway company uses computer tools and mathematical models to analyze market data and predict customer behavior.

The division of a rail link into several sections that can be booked separately involves very specific strategies and alogorhythms that are not found in air travel, hotels or cruises. Indeed, to maximize revenue on a train connecting station A to station Z, and stopping at stations B, C, D, etc., demand must be forecast for all possible origins and destinations, then optimization of the total revenue by ensuring that, for example, strong sales on sector B-D does not limit the ability to sell sector A-Z which might have a lower revenue per kilometer than sector B-D, but would offer a much higher total revenue.

Railway revenue management KPIs

Revenue management KPIs are indicators that measure and evaluate the effectiveness of the yield strategy. Revenue management KPIs for railway companies can vary depending on the type of service, the market, the objectives, etc. Here are some examples of revenue management KPIs for railway companies:

  • The number of wagons loaded (carloads)
  • Revenue per loaded wagon (revenue per carload)
  • The number of tonne-kilometres (revenue ton-miles)
  • The train occupancy rate (load factor)
  • Revenue per passenger-kilometre
  • Average revenue per ticket sold (average ticket price)

What are the specificities of revenue management for car parks?

Yield management for car parks is a technique that consists of adjusting prices according to demand and the availability of parking spaces. It is mainly used in airports, but the approach is attracting a growing number of operators. The promise is to maximize revenues by attracting customers with attractive rates in low season periods, and by increasing prices in high season periods, which helps to optimize occupancy rates.

Car park operators such as airports often offer several facilities, with different levels of service, in particular a more or less long distance to walk for the consumer.

Thus the car parks closest to the check-in and arrival halls have high rates, while the distant long-term car parks address another customer segment.

Beyond airports, yield management applied to car parks manages the specificities linked to monthly or annual subscriptions, with the particularity of having to arbitrate between:

  • allocating capacity to regular subscription customers (with a very low but perfectly predictable income per hour)
  • the allocation of seats at a preferential rate reserved in advance
  • the allocation of seats to passing customers, at a price varying according to the day and the hour according to a pre-established price list
  • or even according to an algorithm of dynamic pricing

For car parks bookable online, the optimal price is generated for each booking request.

The most advanced methods consist of charging variable prices for drive-up customers, where dynamic prices are displayed on digital panels at the entrance to the parking lot for vehicles without reservations.

Some systems even use algorithms that consider multiple factors, such as seasonality, weather, special events, or competition.

For example, in town, rainy or scorching weather increases the demand for covered car parks as close as possible to amenities.

Car parks revenue management KPIs

For parking revenue management, there are several possible KPIs, such as:

  • The occupancy rate: the percentage of places occupied compared to the total number of places available.
  • Revenue per available space (RevPAS): the total revenue generated by the car park divided by the total number of available spaces.
  • Average revenue per occupied space (RevPOC): the total revenue generated by the car park divided by the number of spaces occupied.
  • The cost per available space (CPD): the total cost of parking (maintenance, staff, taxes, etc.) divided by the total number of spaces available.
  • The average cost per occupied space (CPOC): the total cost of parking divided by the number of occupied spaces.
  • The gross margin per available place (MBPD): the difference between the RevPAS and the CPD.
  • The average gross margin per occupied space (MBPOC): the difference between the RevPOC and the CPOC.

These KPIs can help analyze parking profitability, optimize pricing and promotions, identify opportunities for improvement, and benchmark performance against competitors or targets.

What are revenue management jobs?

Revenue management jobs are positions that involve applying revenue management techniques to optimize product availability and price based on consumer behavior. Some examples of revenue management jobs are revenue manager, director of hotels business, analyste revenue and more.

Revenue management jobs in hospitality

Hospitality revenue management jobs are positions that focus on optimizing hotel revenue and profitability using pricing, distribution, and marketing strategies. There are different types of revenue management jobs in hospitality, such as:

  • Revenue Manager: responsible for defining and implementing revenue management policies and procedures for one or more hotels
  • Revenue Analyst: responsible for analyzing market data, hotel performance and demand trends to provide recommendations and reports to the Revenue Manager.
  • Cluster Revenue Manager: responsible for revenue management for a group of hotels belonging to the same chain or group
  • Director of Revenue Management: responsible for overseeing and leading the revenue management team, as well as coordinating with other business departments such as marketing, sales and distribution

The skills required for these jobs vary by level and type of position, but generally include:

  • Good knowledge of the local and regional hotel market
  • Proficiency in technological tools such as reservation systems, performance management systems and analytics software
  • Ability to analyze quantitative and qualitative data and draw conclusions
  • Ability to develop and implement effective strategies to maximize revenue
  • Ability to communicate effectively with internal stakeholders and external
  • Ability to work in a team and to manage change.

Revenue management jobs in the airline industry

Revenue management jobs in the airline industry involve using data analytics to forecast demand, manage inventory, monitor competitors’ prices and identify new revenue opportunities.

Here are some examples of revenue management jobs in the airline industry:

  • Director of Revenue Management: responsible for the strategic and operational direction of revenue management for an airline. He oversees the pricing, inventory control and optimization, demand forecast and revenue integrity teams, and also sometimes distribution and ancillary revenue fonctions.
  • Revenue Management Analyst: Responsible for using data and advanced analytics to identify new revenue opportunities, assess market performance, and support pricing and inventory decisions.
  • Revenue Management Specialist: Responsible for daily market monitoring and adjusting pricing and availability based on demand, competition and business objectives. The skills required for this job generally include: - A solid knowledge of the aviation sector and customer behavior - Mastery of IT and statistical tools used for revenue management - An ability to analyze complex data and derive actionable insights - An ability to communicate effectively with internal and external stakeholders - Results orientation and ability to solve problems
  • Demand manager: The position of demand manager in an airline consists of forecasting passenger demand for different routes and market segments, managing seat availability and adjusting prices according to competition and commercial objectives. The demand manager uses sophisticated systems and data to analyze customer behavior, market trends, and demand influencers, such as seasonality, special events, capacity offering in the market and long term trends. The demand manager works closely with the sales, pricing and operations teams to optimize the revenue and profitability of the airline. For this position, it is generally necessary to have:
    • Higher education in management, economics or statistics
    • Previous experience in revenue management or pricing
    • A mastery of the IT and analytical tools used for forecasting and optimizing demand
    • An ability to interpret complex data and derive strategic recommendations
    • An ability to communicate effectively with internal and external stakeholders
    • Results orientation and ability to solve problems

Revenue management jobs in the railway industry

Revenue management jobs in the railway industry are related to optimizing rail revenues by using data analysis, forecasting, pricing strategies and customer segmentation. Some examples of revenue management jobs are:

  • Revenue Manager: responsible for setting and implementing revenue strategies, managing revenue systems and tools, monitoring performance indicators and reporting on revenue trends.
  • Revenue Analyst: responsible for collecting and analyzing data on customer behavior, demand patterns, market conditions and competitor actions, providing insights and recommendations to support revenue decisions.
  • Revenue Consultant: responsible for providing expert advice and guidance on revenue management best practices, processes and solutions to rail operators, agencies or other stakeholders.

The required skills for revenue management jobs in the railway industry vary depending on the role and level of responsibility. However, some common skills are:

  • Analytical skills: ability to work with large amounts of data, use statistical methods and tools, identify patterns and trends, draw conclusions and make recommendations
  • Communication skills: ability to present complex information clearly and persuasively, both verbally and in writing
  • Commercial awareness: understanding of rail industry dynamics, customer needs, market opportunities and competitive threats
  • Problem-solving skills: ability to identify issues, generate alternatives and implement solutions
  • Teamwork skills: ability to collaborate effectively with colleagues from different functions

Revenue management jobs in the cruise industry

Revenue management jobs in the cruise industry are related to optimizing cruise revenues by using marketing strategies, data analysis, pricing techniques and customer segmentation. Some examples of revenue management jobs are:

  • Marketing & Revenue Manager: responsible for overseeing all the revenues onboard the ship and helping implement strategies to increase onboard sales within various departments. Works closely with the Hotel Director and Cruise Director.
  • Revenue Analyst: responsible for collecting and analyzing data on customer behavior, demand patterns, market conditions and competitor actions, providing insights and recommendations to support revenue decisions. Works closely with Revenue Managers and other stakeholders.
  • Revenue Management Consultant: responsible for providing expert advice and guidance on revenue management best practices, processes and solutions to cruise operators, agencies or other stakeholders. Works independently or as part of a team.

The required skills for revenue management jobs vary depending on the role and level of responsibility. However, some common skills are:

  • Analytical skills: ability to work with large amounts of data, use statistical methods and tools, identify patterns and trends, draw conclusions and make recommendations
  • Communication skills: ability to present complex information clearly and persuasively, both verbally and in writing
  • Commercial awareness: understanding of cruise industry dynamics, customer needs, market opportunities and competitive threats
  • Problem-solving skills: ability to identify issues, generate alternatives and implement solutions
  • Teamwork skills: ability to collaborate effectively with colleagues from different functions

What are the reference sources of information on Revenue Management?

Books

Journals

Internet websites

Wikipedia offers an alternative, unofficial description of Revenue Management:

How to train in revenue management?

Hospitality

  • eCornell, a private education company, sells commercial onsite and online training programs tailored to hoteliers
  • Ideas, a private technology provider, offers free basic online training

Aviation

  • IATA, the professional standards and lobbying association of the airline industry, has a theorical online training program
  • Yield Tactics, an international consulting firm, organizes face-to-face training at the premises of airlines around the world

Who are the consulting firms specialized in revenue management?

General case

  • Major strategic consulting firms such as McKinsey, BCG or Bain can include services related to improving your revenue management.
  • In fact, many generalist firms offer their services, with varying degrees of expertise.
  • For more specialized needs, you can call on consulting firms whose core business is revenue management and pricing, such as the consulting firm Yield Tactics.

Airlines

  • IATA, the International Air Transportation Association, proposes consulting services to their members
  • Technological companies such as Amadeus and Sabre have internal consultancy services that are restricted to their current or future customers
  • Firms specializing in revenue management and pricing for airlines, such as Airline Tactics, offer high-end and ultra-specialized consulting services.

Hospitality

There are a very large number of consulting firms specializing in yield management for the hotel industry, and unlike the aviation sector, you will find local expert firms everywhere in the world, such as Xotels.

Other sectors

For other sectors, given their low use of revenue management, it is difficult to find highly specialized consulting companies. Better then to call on a consulting firm specializing in revenue management and pricing which is used to working with many sectors of activity, and which will have the necessary perspective to adapt to yours. The consulting firm Yield Tactics (which sponsors this wiki page) intervenes all over the world on specific topics related to revenue management and pricing strategies, particularly in the tourism and transport sectors.

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