The document discusses revenue management pricing strategies used by airlines. It provides arguments both for and against these strategies from the perspective of airlines and customers. Customers generally accept revenue pricing as it allows them to sometimes get very cheap last-minute tickets. However, it can also disadvantage customers who need to fly at specific times when prices are higher. The document also discusses ways customers try to manipulate airline systems to get better fares, such as waiting until the last minute or being flexible with travel dates and itineraries.
The document discusses revenue management pricing strategies used by airlines. It provides arguments both for and against these strategies from the perspective of airlines and customers. Customers generally accept revenue pricing as it allows them to sometimes get very cheap last-minute tickets. However, it can also disadvantage customers who need to fly at specific times when prices are higher. The document also discusses ways customers try to manipulate airline systems to get better fares, such as waiting until the last minute or being flexible with travel dates and itineraries.
The document discusses revenue management pricing strategies used by airlines. It provides arguments both for and against these strategies from the perspective of airlines and customers. Customers generally accept revenue pricing as it allows them to sometimes get very cheap last-minute tickets. However, it can also disadvantage customers who need to fly at specific times when prices are higher. The document also discusses ways customers try to manipulate airline systems to get better fares, such as waiting until the last minute or being flexible with travel dates and itineraries.
The document discusses revenue management pricing strategies used by airlines. It provides arguments both for and against these strategies from the perspective of airlines and customers. Customers generally accept revenue pricing as it allows them to sometimes get very cheap last-minute tickets. However, it can also disadvantage customers who need to fly at specific times when prices are higher. The document also discusses ways customers try to manipulate airline systems to get better fares, such as waiting until the last minute or being flexible with travel dates and itineraries.
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1.
Case for the pricing system:
A price system compares the prices consumers are willing to pay for different amounts of each good or service to the desires of consumers. For me personally there are a lot of benefits to the revenue pricing scheme. As flying is often expensive, it is quite advantageous to have a flexible pricing approach that occasionally enables clients to use the services for less money. Supply and demand play a significant role in determining how much airlines charge for their services. Airlines continuously watch the market and frequently alter their prices to meet both the demands of the market and their own goals. Airlines adjust ticket prices up or down based on the anticipated demand for specific locations and times of year in order to maximise revenue and fill every available seat. The airline can secure a customer by offering discounts to customers who purchase repeated tickets, encouraging them to make similar purchases in the future. By offering discount programmes like the frequent flyer programs like AAdvantage, SkyMiles and Mileage Plus etc, the airline is rewarding a consumer for their loyalty to the business, increasing the likelihood that they will stick with this airline rather than choosing a different one. Customers are more likely to sign up for these loyalty programmes when they are aware that they can receive significant discounts by doing so. 2. Case against the pricing system: Finding out that the individual seated next to them paid a considerably lower fee than they did for their seat annoys travellers just as much as these inconveniences do. On the same plane, ticket prices resulting from this revenue management technique can range from free to thousands of dollars. Customers' dissatisfaction may hurt the reputation of the airline in the long run if different passengers on the same aircraft were charged different prices. Customers might have the deceptive impression that the airline favours certain passengers, which could lead them to transfer to an airline with what appears to be a more consistent price structure. Due to the intense competition within the sector, these price discriminations may cause passengers to choose alternative airlines. So, unless an airline has a sizable market share and a high level of brand loyalty among its patrons, using a revenue pricing scheme could be dangerous and result in the company losing clients to rivals. 3. Does the public seem to accept revenue management? The ability to charge differently for their product, which in the case of the airline industry is the seats on the plane, is provided by revenue management. The airline incentivizes customers to purchase airline tickets by lowering the cost of tickets for low-demand flights, while raising the cost of tickets for flights that are in high demand in order to generate more income. As a result of the following qualities, revenue pricing can be used in the aviation industry: the demand for the product or service is not constant it keeps on changing, variable costs are cheap but fixed prices are very high, the resources available are fixed and he good or service can be sold before being used. Customers can sometimes receive very cheap plane tickets because the airline is trying to fill in seats at the last minute, which is advantageous to the customer, but depending on their circumstances, customers might either gain or be put at a disadvantage by revenue management. However, there are instances where a traveller must fly immediately; in these circumstances, they will need to pay the usual cost or maybe even a very high fare to secure a spot on the aircraft. The majority of clients are aware that prices are higher during peak travel times, such summer break or the holidays, because demand is so great and prices are still willing to pay. So, the customers do accept the revenue management.
4. What would happen if you overheard the person in front of you in
line getting a better room rate at a Hilton Hotel? Initially, my first inclination would be to ask the person directly how they were able to obtain such a great deal on the room if I overheard them say they received a lot better rate than I did in order to find out the truth. I would then ask the reception if they could give me a similar rate if that was possible. This person might be getting a better room rate for a number of reasons, including: Maybe this person's flight was delayed, so the airline offered them a room at a price that was significantly less than the going rate, or the person is a member of Hilton's Loyalty Rewards programme may be, or Some airlines have agreements with big hotels that allow their passengers to reserve a room at a price that is much cheaper than the going rate. 5. How do customers manipulate the airline systems to get better fares? Going to the airport and waiting until the last minute to purchase a ticket is a trick practised by customers. This enables consumers to purchase a ticket for a significant discount since the airline is currently hustling to fill the available seats. However, there is always a chance that using this strategy will result in you missing the trip if there are no last-minute openings due to an overbooked flight. Being flexible with the itinerary also gives customers the chance to get a better deal; customers who don't need to get somewhere quickly will choose flights with stopovers because they are less expensive than direct flights. If customers choose an undesirable seat, such as one on the aisle, in the back of the plane, or close to the exit, they may be able to save money on their ticket. Customers frequently utilise a number of strategies to make sure they get the best value on an airline ticket when they purchase their journey. Utilizing a website that evaluates aeroplane prices from several carriers and lets users choose the deal that is most affordable is the most popular technique. The price of tickets can also be manually checked by customers by visiting airline websites continuously throughout the day.