Talking tech with AWS – reworking the approach to revenue management

After a two-year hiatus in response to COVID-19 travellers are eager to explore again, but their shopping behaviours no longer mirror their previous patterns.

Pricing analysts and revenue management specialists must come to grips with this new reality to determine their target audience, now that travellers have different Customer Lifetime Values (CLV), and they must become more creative to obtain more market signals and better model demand.

Ultimately, it comes down to the basics of revenue management: what is the best price to charge for flights, seats, cars, or hotel rooms to maximise profits, and having a clear understanding of whether pricing policies are displacing or stimulating demand.

For travel there are two main constraints: a finite number of products to sell, and a perishable product that is no longer sellable after a certain date/time.

As such, forecasting demand for the product is key.