Empirical Studies Of Revenue Management Practices: Understand Your Competition And Customers

EMPIRICAL STUDIES OF REVENUE MANAGEMENT PRACTICES: UNDERSTAND YOUR COMPETITION AND CUSTOMERS Jun Li Gerard Cachon This dissertation empirically examines factors that challenge revenue management practices in travel industry — air-travel and lodging. In particular, it focuses on strategic interactions among firms and strategic interactions between firms and customers. While most traditional revenue management focuses on single firm problems, better understanding competition and customers recently become two emerging themes in both theories and practices of revenue management. Meanwhile, with 20 years’ successful implementation of sophisticated revenue management systems in both airline and hotel industries, they have accumulated rich data to better understand threats and opportunities currently facing both industries. Furthermore, with the proliferation of online distribution channels, extensive information has been made available to both customers and competitors. How to utilize such opportunity to understand customers and competition remains a question to both industry professionals and academic researchers. This dissertation contains three parts. The first part studies implications of strategic alliances in the airline industry. Airlines in the same alliance are competitors and partners at the same time. After alliances are formed, airlines’ networks are expected to