Demand Planning and Revenue Management

Joern Meissner, Arne K Strauss

Abstract Revenue Management (RM) becomes increasingly important in the service industry, especially after its successful applications in the airline context. Though still often being associated with the airline business only, it actually has wide applications in other service industries as well such as hotels, entertainment (e.g. television, casinos, sporting events), transport (e.g. car rental, freight, railway), retailing and telecommunication (mobile phone). RM is concerned with managing demand by means of controlling capacity and price in order to maximize expected revenue. There exists a large literature mainly in the airline context, but recently also a growing amount of research is devoted to many other service industries as mentioned above.

We will give an overview of both theory and practical applications, in particular for the hotel case. The basic principles of RM will be explained and illuminated by including practical implementations as far as possible. This chapter is intended to highlight the importance of RM to many service industries and to outline the underlying ideas, supplemented by insights into current RM practice.

Revenue Management, Yield Management, Service Industries, Demand Planning

Book Service Chain Management: Technology Innovation for the Service Business. Edited by Christos Voudouris, Gilbert Owusu, Raphael Dorne, David Lesaint. Springer 2008. pp 109–124.
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