Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May...
-
Upload
barnaby-stone -
Category
Documents
-
view
216 -
download
2
Transcript of Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May...
![Page 1: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/1.jpg)
Revenue ManagementRevenue Management
CRM RM2003 Workshop
Centre de recherches mathematiques
University of Montreal
May 16, 2003
Challenges Faced In the Challenges Faced In the Rental Car IndustryRental Car Industry
![Page 2: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/2.jpg)
Purpose
• Introduce the Rental Car Revenue Management Practice• Illustrate some “interesting” problems• Stimulate interest and facilitate desires to work on
challenging real life and timely problems• Win – win applied science
StudentsReal life problems (relevance) and data (feasibility)
VendorsCommunication, focus, and business strategies
IndustryLow cost research, development, and diverse thought
![Page 3: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/3.jpg)
Agenda
Introduction• Brief Background on DTAG• Our “Revenue Management System”• Car Rental Market Specifics
Challenges & 7 Key Areas of Interest
Q & A
![Page 4: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/4.jpg)
Dollar Thrifty Automotive Group
Just recently made the Fortune ™ 1,000 List (# 999)• Over $1 billion in Annual Revenue • Continued growth over past 5 years (Including 2001 & 2002)• Low cost provider – mostly leisure orientated consumers• The most profitable Car Rental company
Dollar is mostly corporately owned and “on airport”Thrifty is * mostly franchisees
• Worlds largest Car Rental Franchise
Internal merger - January 2003• * New growth initiatives through Corporate acquisitions of target
licensees• Resultant is now “Dual Branding”
![Page 5: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/5.jpg)
The Complete Revenue Management System “RMS”
Science
ProcessingPerformanceMeasurement
HumanResource
AutomationDecisionSupport
![Page 6: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/6.jpg)
Reports, Graphs, Analysis& Research
ReservationsRates
&Turndowns
Data and Information Flow
RateManagement
Rental TransactionsRentals, Returns, Fleet, Walkups, Offsells
Forecast,Optimization,Competitive
RatePlacement
![Page 7: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/7.jpg)
Rental Car Market Specifics
Supply• Fleet is flexible to a degree depending on time horizon• Fleet is also a significant fixed cost component in the short term• It also moves – (relocates itself)
Demand• Mostly “secondary demand” Inelastic as a market whole• Car Rental is a Commodity to a large extent – (Same cars)
Service is the primary differentiating quality (what % of consumption is it?) Therefore, very Elastic between companies
Market• Fluid pricing capabilities – dynamic pricing is prevalent• Low barriers to entry – no “geographical markets” per say – most companies can be
everywhereEconomies of Scale
• Since the fleet is highly leveraged, companies can run enormous volumes and spread the fixed costs over larger revenue base.
![Page 8: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/8.jpg)
Areas of Interest
1. Segmentation
2. Forecasting and optimization
3. Business strategy, competitive information and analysis
4. Decision support
5. Performance measurement
6. Data
7. People
![Page 9: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/9.jpg)
1. Segmentation Methods
• Market Segment (Business, Leisure, Tour,..)
• Distribution channel
• Length of rent (LOR)
• Brand
• Car class
• Arrival date, day of week, and time of day
• And yes, to some extent – Advanced days
![Page 10: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/10.jpg)
1. Segmentation
Methods to segment
Fencing off segments
Capitalize on different demand levels and elascticities
When to increase / decrease segmentation
The end result is pricing
![Page 11: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/11.jpg)
1. Segmentation Illustration
Consolidators
GDS
Phones
Internal Sites
InternetTravel Agents
Leisure Business
Tour
![Page 12: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/12.jpg)
2. Forecasting and Optimization
Forecasting / Proactive Approach• What to forecast? What level of detail? How to forecast
(Method)? What to do with a forecast? Demand Rate No Show, Cancellations Overbooking Booking (and Demand) Paces and Walkup Upsell and Upgrade Competitive information and gaming
• Seasonality (Calendar, DOW, Business Cycle)• Unconstraining (Inclusion of Turndowns / Conversions)
Optimization• Tradeoffs, Objective, Methods, and Implementation
![Page 13: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/13.jpg)
Forecasting Samples3/20/03 PHXMET
0
500
1000
1500
2000
2500
3000
3500
4000
3/20
/03
3/22
/03
3/24
/03
3/26
/03
3/28
/03
3/30
/03
4/1/
034/
3/03
4/5/
034/
7/03
4/9/
03
4/11
/03
4/13
/03
4/15
/03
4/17
/03
4/19
/03
4/21
/03
4/23
/03
4/25
/03
4/27
/03
4/29
/03
5/1/
035/
3/03
5/5/
035/
7/03
5/9/
035/
11/0
3
5/13
/03
5/15
/03
5/17
/03
5/19
/03
5/21
/03
5/23
/03
5/25
/03
5/27
/03
5/29
/03
5/31
/03
6/2/
03
6/4/
036/
6/03
6/8/
036/
10/0
3
6/12
/03
6/14
/03
6/16
/03
Date
Dem
and
/ F
leet
Unconstrained Constrained Fleet NOR
Total Revenue
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
Jan-
99
Jun-
99
Nov
-99
Apr
-00
Sep
-00
Feb
-01
Jul-0
1
Dec
-01
May
-02
Oct
-02
Mar
-03
Aug
-03
Jan-
04
Jun-
04
Nov
-04
Month - Year
$ (U
S) Data
Fitted
Forecast
Upper 95%
Low er 5%
![Page 14: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/14.jpg)
PHX - I
3/20/03 PHXMET I Car Class
0
100
200
300
400
500
600
700
800
900
3/20
/03
3/22
/03
3/24
/03
3/26
/03
3/28
/03
3/30
/03
4/1/
03
4/3/
03
4/5/
03
4/7/
03
4/9/
03
4/11
/03
4/13
/03
4/15
/03
4/17
/03
4/19
/03
4/21
/03
4/23
/03
4/25
/03
4/27
/03
4/29
/03
5/1/
03
5/3/
035/
5/03
5/7/
03
5/9/
03
5/11
/03
5/13
/03
5/15
/03
5/17
/03
5/19
/03
5/21
/03
5/23
/03
5/25
/03
5/27
/03
5/29
/03
5/31
/03
6/2/
03
6/4/
03
6/6/
03
6/8/
03
6/10
/03
6/12
/03
6/14
/03
6/16
/03
Date
Dem
and
/ F
leet
Unconstrained Constrained Fleet NOR
![Page 15: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/15.jpg)
PHX - M
3/20/03 PHXMET M Car Class
0
50
100
150
200
250
300
350
400
450
500
3/20
/03
3/22
/03
3/24
/03
3/26
/03
3/28
/03
3/30
/03
4/1/
03
4/3/
034/
5/03
4/7/
03
4/9/
034/
11/0
34/
13/0
3
4/15
/03
4/17
/03
4/19
/03
4/21
/03
4/23
/03
4/25
/03
4/27
/03
4/29
/03
5/1/
035/
3/03
5/5/
035/
7/03
5/9/
03
5/11
/03
5/13
/03
5/15
/03
5/17
/03
5/19
/03
5/21
/03
5/23
/03
5/25
/03
5/27
/03
5/29
/03
5/31
/03
6/2/
036/
4/03
6/6/
03
6/8/
036/
10/0
3
6/12
/03
6/14
/03
6/16
/03
Date
Dem
and
/ F
leet
Unconstrained Constrained Fleet NOR
![Page 16: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/16.jpg)
PHX - 4
3/20/03 PHXMET 4 Car Class
0
50
100
150
200
250
300
350
3/20
/03
3/22
/03
3/24
/03
3/26
/03
3/28
/03
3/30
/03
4/1/
034/
3/03
4/5/
034/
7/03
4/9/
034/
11/0
34/
13/0
3
4/15
/03
4/17
/03
4/19
/03
4/21
/03
4/23
/03
4/25
/03
4/27
/03
4/29
/03
5/1/
035/
3/03
5/5/
035/
7/03
5/9/
035/
11/0
35/
13/0
35/
15/0
3
5/17
/03
5/19
/03
5/21
/03
5/23
/03
5/25
/03
5/27
/03
5/29
/03
5/31
/03
6/2/
036/
4/03
6/6/
036/
8/03
6/10
/03
6/12
/03
6/14
/03
6/16
/03
Date
Dem
and
/ F
leet
Unconstrained Constrained Fleet NOR
![Page 17: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/17.jpg)
PHX - L
3/20/03 PHXMET L Car Class
0
50
100
150
200
250
300
3/20
/03
3/22
/03
3/24
/03
3/26
/03
3/28
/03
3/30
/03
4/1/
034/
3/03
4/5/
034/
7/03
4/9/
034/
11/0
34/
13/0
34/
15/0
34/
17/0
34/
19/0
34/
21/0
34/
23/0
34/
25/0
34/
27/0
34/
29/0
35/
1/03
5/3/
035/
5/03
5/7/
035/
9/03
5/11
/03
5/13
/03
5/15
/03
5/17
/03
5/19
/03
5/21
/03
5/23
/03
5/25
/03
5/27
/03
5/29
/03
5/31
/03
6/2/
036/
4/03
6/6/
036/
8/03
6/10
/03
6/12
/03
6/14
/03
6/16
/03
Date
Dem
and
/ F
leet
Unconstrained Constrained Fleet NOR
![Page 18: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/18.jpg)
2. Optimization – Sample Output
Current Recs PHX RTD RCUD1 ICAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
6/15
Arrival DATE
Rec
SP
RE
AD
![Page 19: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/19.jpg)
PHX I – LOR 3-4 RECS
Current Recs PHX RTD RCUD3 ICAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
Arrival DATE
Rec
SP
RE
AD
![Page 20: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/20.jpg)
PHX L – LOR 1-2 RECS
Current Recs PHX RTD RCUD1 LCAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
6/15
Arrival DATE
Rec
SP
RE
AD
![Page 21: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/21.jpg)
Implementation
Information
Processing
Data
Conclusions / NewData Needs
Post EventAnalysis
3. Competitive Information
1. Decision Support
2. Formal Integration
3. Increasing the understanding
![Page 22: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/22.jpg)
3. Competition - SampleInternet Rates : LOC: IAD / SITE: Orbitz / CAR TYPE: E / LOR: 7
100
110
120
130
140
150
160
170
180
4/9/
03
4/11
/03
4/13
/03
4/15
/03
4/17
/03
4/19
/03
4/21
/03
4/23
/03
4/25
/03
4/27
/03
4/29
/03
5/1/
03
5/3/
03
5/5/
03
5/7/
03
5/9/
03
ARRIVAL DATE
RA
TE
HERTZ THRIFTY ALAMO ENTERPRISE BUDGETAVIS NATIONAL DOLLAR
![Page 23: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/23.jpg)
One Method for Implementation - Strategy ScreensCurrent Recs PHX RTD RCUD1 ICAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
6/15
Arrival DATE
Rec
SP
RE
AD
$1 < Lowest PricedCompetitor (#1)
Match
$1 <
Match
$1 <
Match
# 1
# 2
# 3
# 3
# 2
![Page 24: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/24.jpg)
4. Decision SupportTypes
• Reports• Analysis
Formal Ad Hoc
Formats• Production systems • Independent “consolidating” DSS • Prototypes and/or informal tools
Support• Technical• Intellectual – Use/Misuse, education and training tools
Purpose• Transcend intuition• Bridge the theory and application• To be the catalyst of better decisions• Gain insight and understanding – Build knowledge
![Page 25: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/25.jpg)
DSS Samples - Interfaces
![Page 26: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/26.jpg)
DSS Samples - Report
Type Advance LOR LOR LOR LOR LOR LOR LOR LOR LOR LORDays Less than 1 1 to 2 3 to 4 5 to 6 7 to 8 9 to 10 11 to 14 15 to 21 22 to 28 29 +
Booked T & M less than 24 hours $38.49 $45.25 $37.98 $37.54 $24.74 $22.36 $35.09 $26.56 $30.13 $0.001 to 2 $39.59 $40.36 $34.10 $35.44 $27.47 $34.54 $26.31 $25.57 $28.50 $0.003 to 4 $22.58 $33.24 $33.74 $36.52 $30.76 $30.52 $26.02 $0.00 $0.00 $0.005 to 7 $35.14 $33.12 $33.48 $39.89 $36.15 $29.38 $28.12 $0.00 $0.00 $0.008 to 10 $33.04 $34.28 $35.06 $36.99 $34.62 $42.32 $30.96 $18.37 $0.00 $0.0011 to 14 $29.57 $35.21 $35.01 $35.04 $40.80 $37.01 $27.47 $0.00 $0.00 $0.0015 to 21 $40.06 $35.90 $35.83 $33.46 $29.99 $34.11 $26.38 $27.39 $0.00 $0.0022 to 28 $0.00 $37.03 $37.24 $35.39 $26.80 $42.86 $29.54 $26.85 $0.00 $0.0029 to 44 $44.88 $37.25 $40.00 $36.79 $30.97 $28.83 $31.61 $0.00 $0.00 $0.0045 days out plus $0.00 $37.06 $55.44 $49.15 $43.97 $44.55 $36.52 $0.00 $0.00 $0.00
Booked Days less than 24 hours 2 88 63 19 16 3 2 3 1 01 to 2 19 168 180 73 40 13 5 2 2 03 to 4 3 74 98 39 38 4 6 0 0 05 to 7 9 90 132 59 33 5 5 0 0 08 to 10 6 58 89 39 19 8 4 1 0 011 to 14 4 69 97 41 36 5 3 0 0 015 to 21 2 60 144 80 49 9 8 3 0 022 to 28 0 23 87 66 38 4 4 2 0 029 to 44 2 17 61 39 44 8 5 0 0 045 days out plus 0 4 57 86 108 12 10 1 1 0
No Show less than 24 hours 0.00% 41.33% 35.71% 26.92% 44.83% 25.00% 50.00% 40.00% 0.00% 0.00%1 to 2 34.48% 33.86% 30.77% 27.72% 43.66% 23.53% 44.44% 66.67% 33.33% 0.00%3 to 4 40.00% 23.71% 24.03% 38.10% 34.48% 55.56% 33.33% 100.00% 0.00% 0.00%5 to 7 25.00% 27.42% 21.89% 29.76% 35.29% 58.33% 28.57% 0.00% 0.00% 0.00%8 to 10 14.29% 19.44% 23.28% 22.00% 38.71% 0.00% 20.00% 0.00% 0.00% 0.00%11 to 14 33.33% 22.47% 24.22% 30.51% 28.00% 28.57% 40.00% 100.00% 0.00% 0.00%15 to 21 60.00% 22.08% 22.16% 34.43% 31.94% 35.71% 38.46% 40.00% 0.00% 0.00%22 to 28 100.00% 23.33% 21.62% 25.00% 25.49% 42.86% 20.00% 33.33% 0.00% 0.00%29 to 44 0.00% 50.00% 29.07% 32.76% 26.67% 20.00% 37.50% 0.00% 0.00% 0.00%45 days out plus 0.00% 42.86% 25.00% 15.69% 27.03% 40.00% 16.67% 66.67% 0.00% 0.00%
Reservations by Advance Days & Length of Rent ReportLocation DEN for all Car Classes From 03/15/2003 To 03/30/2003
For all Business Segments As Of 04/30/2003 11:15
![Page 27: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/27.jpg)
DSS - Samples
![Page 28: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/28.jpg)
PHX I – LOR 1-2 RECS
Current Recs PHX RTD RCUD1 ICAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
6/15
Arrival DATE
Rec
SP
RE
AD
![Page 29: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/29.jpg)
PHX I – LOR 3-4 RECS
Current Recs PHX RTD RCUD3 ICAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
Arrival DATE
Rec
SP
RE
AD
![Page 30: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/30.jpg)
PHX L – LOR 1-2 RECS
Current Recs PHX RTD RCUD1 LCAR Post Date: 3/18/03
-20%
-10%
0%
10%
20%
30%
40%
3/19
3/21
3/23
3/25
3/27
3/29
3/31 4/2
4/4
4/6
4/8
4/10
4/12
4/14
4/16
4/18
4/20
4/22
4/24
4/26
4/28
4/30 5/2
5/4
5/6
5/8
5/10
5/12
5/14
5/16
5/18
5/20
5/22
5/24
5/26
5/28
5/30 6/1
6/3
6/5
6/7
6/9
6/11
6/13
6/15
Arrival DATE
Rec
SP
RE
AD
![Page 31: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/31.jpg)
![Page 32: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/32.jpg)
![Page 33: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/33.jpg)
5. Performance MeasurementChallenges
• Lack of a control• Seasonality• Numerous simultaneous variables• Interpretation / subjectivity• Need for aggregation• Internal agenda and bias
Current standard is still year over year and aggregate benchmarks like yield, utilization, and revenue per unit
Performance of what?• System? Implementation? Location? Company?, People?,
Industry?
![Page 34: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/34.jpg)
Performance Measurement Advancements
• Awareness, education, understanding and appreciation
• Opportunity cost models
• Solid economic theory and foundation, then back with quantification efforts
• Turndown and conversion data availability at new levels of “richness”
![Page 35: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/35.jpg)
6. Data
Timeliness matters for production, but perhaps not for research
Not perfect Messy and erroneous, but consistentDetailed transaction levelNeed to aggregate and join Lots of it – diverse, but little history Sample sets are currently available and other are
feasible
![Page 36: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/36.jpg)
7. People
People are not only the glue to make it all work, but they are also the catalyst for new ideas
Process, Integrate, Implement, Create, Innovate, Develop, Communicate and Understand!
![Page 37: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/37.jpg)
Sample Questions or Research Topics
• How correlated is the initial build to final demand?• Ability to segment balanced with the ability to manage• Margin based segmentation (Rev-Cost) with an ability to
capitalize on inelastic demand• Understanding the consumer and gaming the competitors• Opportunity cost Consumer surplus from the industry,
company, or finest detail of business • Price elasticity, elasticity, elasticity From specific
channel pricing to fleet acquisition
![Page 38: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/38.jpg)
![Page 39: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/39.jpg)
![Page 40: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/40.jpg)
![Page 41: Revenue Management CRM RM2003 Workshop Centre de recherches mathematiques University of Montreal May 16, 2003 Challenges Faced In the Rental Car Industry.](https://reader036.fdocuments.net/reader036/viewer/2022062718/56649e7f5503460f94b83e58/html5/thumbnails/41.jpg)
Summary / Q & A