Ian Yeoman

Yield management: a human activity system

Yield management is a process based on forecasting, strategy and people. Most research has converged on the forecasting and strategy elements, neglecting the people element of yield management. Argues that the people element is the cornerstone of successful yield management practices and suggests a matrix framework for an organizational, team and individual approach to yield management based on commitment, focus and boundaries. Explains yield management as a human activity system, therefore adopting a systems theory framework in analysis.

Accessing knowledge at British Airways: the impact of soft OR

Operational research plays a major role in improving the profitability of British Airways (BA), which is the largest, and one of the most successful, international airlines in the world. This study explores the knowledge and facilitation conceptions held by operational research consultants in BA in supporting the decisions and management processes of their internal “clients”. Ten consultants, who were deemed experts in soft OR, were interviewed in order to examine the knowledge they used in helping their clients to manage decisions and change. The findings suggest that while the fundamental ethos of analytical rigour characterises the world‐view that the OR consultants adopt, it may be the modifications to techniques and practices that consultants make in intuitive and creative ways that secure their effectiveness.

The Changing Meaning of Luxury

When Marie Antoinette supposedly said “let them eat cake”, she was seen as a luxury junkie who’s out of control spending grated on the poor and unfortunate French people. But today, cake has become one of our favourite luxury foods. A revolution has taken place where individuals in the world have got richer. Luxury is no longer the embrace of the kings and queens of France but the mass marketing phenomenon of everyday life. Simply put, luxury has become luxurincation of the commonplace (Berry, 1994; Twitchell, 2001). The word luxury is derived from luxus, meaning sensuality, splendour, pomp and its derivative luxuria, means extravagance, riot and so on. The rise of the luxury in Western society is associated with increasing affluence and consumption. It is a phenomenon that has been creeping up in society for hundreds of years. At the turn of the twentieth century, it was Thorsten Velben (1899) who coined the term “conspicuous consumption” in his theory of the leisure class. Veblen’s argument is based upon the belief that as wealth spreads, what drives consumers’ behaviour is increasingly neither subsistence nor comfort but the “attainment of esteem and envy of fellow men”. Because male wage earners are too circumspect to indulge themselves, they deposit consumption on surrogates. Vicarious ostentation is observed in Victorian men who encouraged their wives and daughters to wear complicated trappings of wealth.

The development of core concepts of yield management

Abstract Yield management offers an Operations Manager a decision support framework for examining the revenue and conservation decision variables that integrate the characteristics of the Heritage Visitor Attraction (HVA) experience. The principles of yield management are drawn from the hotel and airline industries to demonstrate how the problem of fixed capacity is managed in other service sectors. This paper compares these principles against Heritage Visitor Attractions (HVAs), suggesting how they could adopt such concepts. As HVAs serve broader objectives, other than profit maximisation, financial pressures are encouraging the operations manager to devise imaginative and new ways of managing sites. Ten core principles of yield management are suggested that are appropriate to Heritage Visitor Attractions. These core principles are used to evaluate Historic Scotlands and the National Trust for Scotlands approach to revenue management.

The turning points of revenue management: a brief history of future evolution

Purpose The primary aim of revenue management (RM) is to sell the right product to the right customer at the right time for the right price. Ever since the deregulation of US airline industry, and the emergence of the internet as a distribution channel, RM has come of age. The purpose of this paper is to map out ten turning points in the evolution of Revenue Management taking an historical perspective. Design/methodology/approach The paper is a chronological account based upon published research and literature fundamentally drawn from the Journal of Revenue and Pricing Management. Findings The significance and success to RM is attributed to the following turning points: Littlewood’s rule, Expected Marginal Seat Revenue, deregulation of the US air industry, single leg to origin and destination RM, the use of family fares, technological advancement, low-cost carriers, dynamic pricing, consumer and price transparency and pricing capabilities in organizations. Originality/value The originality of the paper lies in identifying the core trends or turning points that have shaped the development of RM thus assisting futurists or forecasters to shape the future.

Does the Customer Trust You

Trust of products, services and organizations is not a subject that people regularly think about. Indeed, trust may sound like some “faddish” or “fuzzy” concept to Revenue Management professionals but a significant amount of research has indicated that profit depends on it to a surprisingly large extent. It is something that can really make a marked difference when it comes to establishing, building and maintaining healthy buyer-seller relationships. What is clear is that in today’s society, characterized by widespread consumer distrust of companies and public bodies, revenue managers need to work hard at developing a trust-based relationship with their customers.

Keeping it pure – a pedagogical case study of teaching soft systems methodology in scenario and policy analysis

Purpose Soft systems methodology (SSM) is well documented in the academic and management literature. Over the last 40 years, the methodology has come to be adapted depending on the tool users’ skills and experience in order to fit the problem. The purpose of this paper is to demonstrate good teaching and learning practice from a pedagogical perspective. Design/methodology/approach Dr Ian Yeoman of Victoria University of Wellington provides a personal reflection of how the methodology is used in the teaching and learning of TOUR301 Tourism Policy and Planning as a policy and scenario analysis method. Findings The paper articulates the seven stages of SSM from problem situation unstructured, through to Rich Pictures, vision and guiding principles, policy solutions, comparisons, feasibility and implementation stages. The paper uses a series of teaching tasks to breakdown the complexity of the methodology thus guiding students and teachers in how to deploy the methodology in the classroom. Originality/value The value of the paper demonstrates the reflective practice of SSM in action as an exemplar of good practice. The paper clearly articulates the stages of the methodology so students and teachers can adopt this approach in classroom environments following a scaffolding learning approach. The use of teaching tasks throughout the paper helps bring clarity and order thus enabling the teacher to effectively teach the subject and the students to learn. The most significant contribution of this paper is the articulation of good teaching practice in policy and scenario analysis which articulated through four learning lessons: facilitating a learning environment; the impact of visual thinking; political theory; the importance of incremental learning; and problem-based learning and international students.

Introduction: How to do it?

Any business must know its customers, specifically you need to know how much your customers will pay for a product and device appropriate strategies. This is not about offering the lowest price in order to fill capacity. It’s about knowing your market segment, how much they will pay when they will purchase and what distribution channels they will use. Pricing is about deciding your market position, that is, premium or low cost, whereas Revenue Management is the strategic and tactical decisions firms take in order to optimize revenues and profits. Since the publication of Peter Belobaba’s PhD thesis work. Air Travel Demand and Airline Seat Inventory Management (1987), which was a defining moment in the management of complexity, capacity allocation and real-time inventory solutions, Revenue Management has come of age, fuelled by superior management science models and greater accessibility to technology in addition to the acceptance of the guiding principle of Revenue Management in enhancing the bottom line. At the same time, society has shifted from manufacturing to a service industries economy where the unit of inventory is time, in which the consumer year on year is more price sensitive. Today, in the age of the Internet, the management time slots as inventory along with instant purchase is the foundation of many consumer products and services. Hence, Revenue Management has spawned across many industries and applications.

The Fundamentals of Yield Management

Yield management or revenue management is the process of allocating the right capacity to the right customer at the right time at the right price in order to maximise revenue or yield. Within the context of operational research, it is the process of matching probabilistic demand to a set of finite resources in a manner that will optimise profit. The application of yield management has been described in a vast variety of service industries, including hotels, tourism and transport. These industries have similar characteristics i.e. constrained capacity and a perishable product. Operational research has made a significant contribution to the development of yield management systems by providing mathematical tools and modelling mechanism’s. The purpose of this chapter, is to provide the reader with an introduction to the ‘fundamentals of yield management’.