DEMAND FORECASTING SYSTEMS AND METHODS UTILIZING FARE ADJUSTMENT
A computer based system for fare adjustment is disclosed. For a particular airline fare class, the system evaluates the financial impact of opening or closing the class, for example taking into account both stimulation effects and dilution effects. Via use of an exemplary fare adjustment system, decision-makers may increase revenues (and/or decrease losses) associated with airline fare class openings and closings.
1 . A method, comprising:
accessing, by a processor for adjusting fares, a bookings table containing seat bookings and forecasted demand for a flight, wherein the seat bookings are grouped into a plurality of fare classes, and wherein at least one fare class in the plurality of fare classes is closed and contains no bookings;
determining, by the processor and using the seat bookings and the forecasted demand, the monetary stimulation value of opening the closed class;
determining, by the processor and using the seat bookings and the forecasted demand, the monetary dilution penalty of opening the closed class; and
comparing, by the processor, the monetary stimulation value to the monetary dilution penalty to generate booking instructions.
2 . The method of claim 1 , wherein, in response to the monetary stimulation value exceeding the monetary dilution penalty, the booking instructions comprise instructions to open the closed class for bookings.
3 . The method of claim 1 , wherein, in response to the monetary dilution penalty exceeding the monetary stimulation value, the booking instructions comprise instructions to keep the closed class closed for bookings.
4 . The method of claim 1 , further comprising communicating, to a reservation system, the booking instructions.
5 . The method of claim 1 , wherein the determining the monetary stimulation value comprises:
determining, by the processor, the proportion of the seat bookings that are product oriented; and
multiplying, by the processor, the proportion of the seat bookings that are product oriented by the average fare in the parent class of the closed class.
6 . The method of claim 1 , wherein the determining the monetary dilution penalty comprises:
determining, by the processor, the proportion of the seat bookings that are price oriented; and
multiplying, by the processor, the proportion of the seat bookings that are price oriented by a loss associated with a seat booking in the closed class.
7 . The method of claim 6 , wherein the loss associated with a seat booking in the closed class represents the difference in average fare between the closed class and the parent class.
8 . The method of claim 6 , wherein the determining the proportion of the seat bookings that are price oriented comprises:
identifying, by the processor, any seat bookings in the bookings table that have been modified as a result of an unobscuring algorithm; and
identifying, by the processor, any seat bookings in the bookings table that are associated with a price oriented customer.
9 . The method of claim 1 , further comprising allocating seat protects in a parent fare class until the expected marginal seat revenue (EMSR) in the parent fare class falls below the adjusted average fare of the child fare class.
10 . The method of claim 1 , further comprising
determining, by the processor, which fare classes in the plurality of fare classes have demand that is obscured;
calculating, by the processor, the unobscured demand for at least one fare class in the plurality of fare classes;
converting, by the processor, the unobscured demand for the at least one fare class into integer values representing seat bookings in the respective fare classes; and
updating, by the processor, the bookings table with the integer values to form an unobscured bookings table.
11 . The method of claim 1 , further comprising:
accessing, by the processor, the bookings table, wherein the bookings table further contains information representing a net prime class seat booking for a flight, and wherein the net prime class seat booking occurred during a first time period;
determining, by the processor, a floor class for the net prime class seat booking in the bookings table;
determining, by the processor, a displacement class for the net prime class seat booking in the bookings table;
determining, by the processor, a target class for the net prime class seat booking in the bookings table, wherein the target class is the higher of the floor class and the displacement class; and
remapping, by the processor, the net prime class seat booking in the bookings table into its target class to form a remapped bookings table.
12 . A non-transitory computer-readable storage medium having computer-executable instructions stored thereon that, in response to execution by a processor for adjusting fares, causes the processor to perform operations comprising:
accessing, by the processor, a bookings table containing seat bookings and forecasted demand for a flight, wherein the seat bookings are grouped into a plurality of fare classes, and wherein at least one fare class in the plurality of fare classes is closed and contains no bookings;
determining, by the processor and using the seat bookings and the forecasted demand, the monetary stimulation value of opening the closed class;
determining, by the processor and using the seat bookings and the forecasted demand, the monetary dilution penalty of opening the closed class; and
comparing, by the processor, the monetary stimulation value to the monetary dilution penalty to generate booking instructions.