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

Abstract

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.