Decision Support In Online Travel Retailing
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PRACTICE PAPERS
Decision support in online travel retailing
B. Venkateshwara Raoà and Barry C. Smith
Received (in revised form): 7th November, 2005
Ã
Research Group, Sabre Holdings, 3150 Sabre Drive, MD 8203 HDQ, Southlake, TX 76092, USA
Tel: þ 1 682 605 1721; Fax: þ 1 682 605 7690; E-mail: beju.rao@sabre.com
B. Venkateshwara Rao is a Senior Principal in Research Group at Sabre Holdings. He develops customer behaviour, pricing, marketing, planning, and deal evaluation models for
Retail and Airline Revenue Management. His research interests are stochastic modelling and nonlinear optimisation. He publishes in
Operations Research and Industrial Engineering journals. He also teaches part time at the
Business School of University of Texas at
Arlington.
Barry C. Smith is Chief Scientist and Senior
Vice President for research at Sabre Holdings.
He developed many of the yield management techniques used throughout the airline industry and in other industries. He is a fellow of the
Airline Group of the International Federation of
Operational Research Societies (AGIFORS).
ABSTRACT
KEYWORDS: travel, retailing, decision support, e-commerce, operations research, pricing
Online travel retailing is an e-commerce success story.
Different retail models exist to sell travel products over the web. These models include online travel agencies, supplier websites, distressed inventory websites, reverse auction web sites, shopping bots, search engines, and portals. Online travel agencies, such as Expedia and Travelocity, are the most mature business accounting for more than half of online leisure travel sales. Online travel agencies acquire
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inventory from multiple airlines, hotels, car rental companies, cruise lines, and event organisers. They merchandise this inventory as standalone as well as packaged categories to online shoppers who benefit from a wide variety of products across multiple suppliers. In this paper, a decision support framework
for
PRACTICE PAPERS
Decision support in online travel retailing
B. Venkateshwara Raoà and Barry C. Smith
Received (in revised form): 7th November, 2005
Ã
Research Group, Sabre Holdings, 3150 Sabre Drive, MD 8203 HDQ, Southlake, TX 76092, USA
Tel: þ 1 682 605 1721; Fax: þ 1 682 605 7690; E-mail: beju.rao@sabre.com
B. Venkateshwara Rao is a Senior Principal in Research Group at Sabre Holdings. He develops customer behaviour, pricing, marketing, planning, and deal evaluation models for
Retail and Airline Revenue Management. His research interests are stochastic modelling and nonlinear optimisation. He publishes in
Operations Research and Industrial Engineering journals. He also teaches part time at the
Business School of University of Texas at
Arlington.
Barry C. Smith is Chief Scientist and Senior
Vice President for research at Sabre Holdings.
He developed many of the yield management techniques used throughout the airline industry and in other industries. He is a fellow of the
Airline Group of the International Federation of
Operational Research Societies (AGIFORS).
ABSTRACT
KEYWORDS: travel, retailing, decision support, e-commerce, operations research, pricing
Online travel retailing is an e-commerce success story.
Different retail models exist to sell travel products over the web. These models include online travel agencies, supplier websites, distressed inventory websites, reverse auction web sites, shopping bots, search engines, and portals. Online travel agencies, such as Expedia and Travelocity, are the most mature business accounting for more than half of online leisure travel sales. Online travel agencies acquire
72
inventory from multiple airlines, hotels, car rental companies, cruise lines, and event organisers. They merchandise this inventory as standalone as well as packaged categories to online shoppers who benefit from a wide variety of products across multiple suppliers. In this paper, a decision support framework
for
References: Ben-Akiva, M. and Lerman, S. R. (1985) Discrete Choice Analysis: Theory and Applications to Travel Harteveldt, H. H., Leaver, S. and Yuen, E. H. (2004a) ‘Online leisure travel forecast 2004–2009: web travel continues its skyward climb’, Forrester Trends, March 22, 2004, Forrester Research Inc. Harteveldt, H. H., Leaver, S. and Meyer, S. (2004b) ‘Trends 2005: travel websites — travel firms invest millions to boost site design and complex bookings’, Forrester Trends, November 9, 2004, Hornick, S. (2004) ‘Fare play’, Airline Business, November 2004. PhoCusWright. (2003) ‘Vacation packages: a consumer tracking and discovery study’, November 2003, PhoCusWright Inc Journal of Revenue and Pricing Management Vol. 5, 1, 72–80 & 2006 Palgrave Macmillan Ltd, 1476-6930 $30.00