Introduction to Pricing and Revenue Management

There is myriad of components that make up successful Pricing and Revenue Management (PRM) Department.
You sure do need multiple reports provided and/or supported by Business Intelligence (booking growth report, daily, weekly progression reports, net daily sales, infare reports and alerts, sell out probability reports and others), Technology and of course humans as analysts, managers and directors.

 Revenue Management and Pricing analysts benefit from having strong analytic, communication, multi-tasking and team work skills. They set the strategy rather than just allocating the seats and creating price points.







There is huge amount of data, collected daily. It comes organized and raw. To gain insight that can be translated into competitive advantage, analysts have to manipulate these data to spot hidden patterns, unveil correlations and ultimately use it to zero in on revenue concerns and opportunities.



Decisions made in PRM department are mainly based on the demand forecast, made by PROS, SABRE
or other application/software. In today’s instant digital world Revenue Management Solutions are becoming smarter and are involving, adopting, evaluating self-produced decisions. For example, PROS has its own intelligence and adjusts forecast and seat allocation, based on historical and real time data.
 PROS collects pre-departure booking data for individual departures at data collection points (DCP).
“The PROS 5 Forecaster forecasts demand for the segment classes of future departures based on the pre-departure and final bookings for past departures of the same forecast group as well as the actual bookings that the future departures have received as of the latest DCP. PROS 5 forecasts demand for unique combinations of flight number, segment, day of week, time-of-day range, compartment, and class.”

Human factor is still critical though, since analysts, who influence system’s decisions have insight about each market. As humans we cannot beat statistical and analytical capabilities of PROS, but we leverage knowledge of holidays and special events at particular O&Ds. We account for calendar shift and holidays’ shifts.

 As an analyst you have to keep thinking about all 12 months in a year. Even though it’s July you have to pay attention to Christmas and Thanksgiving. If you want to be a virtuoso of Revenue Management and Pricing you want to know about your markets everything there is. Once you are assigned the market you take ownership of it.