Dynamic cruise ship revenue management

Maddah, Bacel; Moussawi-Haidar, Lama; El-Taha, Muhammad; Rida, Hussein

doi:10.1016/j.ejor.2010.03.043

Cited by 40 publications

(37 citation statements)

References 16 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…A significant concern in the revenue management for cruise operation differentiated from other industries is in the life boat capacity, which should be considered important for passenger safety. Recently a dynamic programming model for cruise reservation management was developed (Maddah et al, 2010), which considers the life boat capacity as a constraint and rejects any new reservation request if the accumulated reservation has reached the passenger life boat capacity. The revenue management in cruise industry also has more issues to consider than that in other industries such as on-board spending, longer booking period, and very low no-show rate (Biehn, 2006;Talluri and van Rhyin, 2005).…”

Section: Introductionmentioning

confidence: 99%

Optimal Dual Pricing and Passenger Safety Level for Cruise Revenue Management

Cho¹,

Zhang²

2017

JNPR

View full text Add to dashboard Cite

: Despite the remarkable continual growth of the world cruise industry, studies have yet to be attempted on many revenue management problems in cruise operations. This paper suggests two schemes that can be easily applied to cruise revenue management: optimal dual pricing and passenger safety level. In optimal dual pricing, a pair of higher and lower prices is applied to cabin reservation through market segmentation. This scheme can be executed with a linear price-response function for the current unreserved cabins. A cruise line could benefit from this scheme to maximize reservation revenue while attaining full occupancy. The dual pricing scheme is also devised to produce only integer demands to suit real management practices. The life boat capacity is an additional service capacity unique to the cruise industry, catering to passengers' safety. The concept of passenger safety level is defined and computed for any passenger life boat capacity of a cruise ship. It can be used to evaluate the passenger safety of a cruise ship in operation, as well as to determine the number of life boat seats required for a new cruise ship. Hypothetical examples are used to illustrate the operation of these two schemes.

show abstract

Section: Introductionmentioning

confidence: 99%

Optimal Dual Pricing and Passenger Safety Level for Cruise Revenue Management

Cho¹,

Zhang²

2017

JNPR

View full text Add to dashboard Cite

show abstract

“…Studies commonly propose Gamma, Normal shapes and Poisson function for demand distributions 1,14,9,3 . On the other hand, some of the studies make some assumptions for modeling demand under different price levels based on previous data 14,17,13,9 , some use price elasticity functions derived from previous data 12,11 . In our study, the market is monopolistic and the price has been fixed up to this time.…”

Section: Introductionmentioning

confidence: 99%

“…In the study of Bharill and Rangaraj, the strategy of overbooking is interpreted in terms of waitlist management by the railway company and cancellation action of customers; finally revenue management through differential pricing is suggested as a means to increase revenue on average 12 . On the other side, Maddah et al develop a discrete-time dynamic capacity control model for a cruise ship characterized by multiple constraints on cabin and lifeboat capacities, which is the first study developed for cruise ships 13 . To the best of our knowledge, this study is a first attempt that models dynamic pricing for a maritime intercity passenger transportation company.…”

Section: Introductionmentioning

confidence: 99%

A Dynamic Pricing Model for a Maritime Transportation Service Provider

Yanık¹,

Coşgun²,

Ekinci³

2012

IJCIS

View full text Add to dashboard Cite

In this study, the dynamic pricing optimization problem faced by the maritime transportation service provider company is considered. The aim is to find optimal prices for each journey for each level of unsold seats by using probabilistic dynamic programming. Conjoint analysis is used to identify the consumer behavior in case of price changes to the current product, namely journey. The optimal policies show the necessity of applying dynamic pricing policy instead of fixed pricing and the diversification of optimal policies under different conditions.

show abstract

“…Classic examples can be found in the aviation industry and the hotel industry, where a limited number of aircraft seats and hotel rooms are available, respectively (e.g., Vinod [29], Clarke [7]). However, the revenue management models can be applied to a wide range of fields, 5 including but not limited to the car rental industry (Geraghty and Johnson [11]), theatres (Langeveld [17]), golf courses (Kimes [15]), restaurants (Guerriero et alii [12]), and cruise ships (Maddah et alii [21]). All application areas have in common that a limited number of perishable goods is sold, whether it is a hotel room, a seat on an aircraft, a rental car, a seat in the theatre, or a timeslot on a golf course.…”

Section: Introductionmentioning

confidence: 99%

Revenue management under customer choice behaviour with cancellations and overbooking

Sierag

Koole²,

Mei

et al. 2015

European Journal of Operational Research

View full text Add to dashboard Cite

In many application areas such as airlines and hotels a large number of bookings are typically cancelled. Explicitly taking into account cancellations creates an opportunity for increasing revenue. Motivated by this we propose a revenue management model based on Talluri and van Ryzin [27] that takes cancellations into account in addition to customer choice behaviour. Moreover, we consider overbooking limits as these are influenced by cancellations. We model the problem as a Markov decision process and propose three dynamic programming formulations to solve the problem, each appropriate in a different setting. We show that in certain settings the problem can be solved exactly using a tractable solution method. For other settings we propose tractable heuristics, since the problem faces the curse of dimensionality. Numerical results show that the heuristics perform almost as good as the exact solution. However, the model without cancellations can lead to a revenue loss of up to 20%. Lastly we provide a parameter estimation method based on Newman et alii [24]. This estimation method is fast and provides good parameter estimates. The combination of the model, the tractable and well-performing solution methods, and the parameter estimation method ensures that the model can efficiently be applied in practice.

show abstract

Dynamic cruise ship revenue management

Cited by 40 publications

References 16 publications

Optimal Dual Pricing and Passenger Safety Level for Cruise Revenue Management

Optimal Dual Pricing and Passenger Safety Level for Cruise Revenue Management

A Dynamic Pricing Model for a Maritime Transportation Service Provider

Revenue management under customer choice behaviour with cancellations and overbooking

Contact Info

Product

Resources

About