What airlines taught other industries (and Vice Versa)

In brief

Airline Revenue Management has long inspired every other industry (inventory management, fare classes, opportunity value). But the movement has reversed: hospitality taught airlines the value of simpler offers (BAR, NRNC, Branded Fares), while leisure parks demonstrated how to monetize the customer experience (Fast Passes, ancillary revenues). Tomorrow’s Revenue Management will no longer come from a single industry: it will be multi-industry.

Why did airlines gain such a head start in Revenue Management?

For a long time, Revenue Management spoke with an airline accent.

It must be said that this industry was several years ahead of most others. Beyond the traditional RM prerequisites (fixed capacity, perishable inventory, advance bookings, strong seasonality and intense competition), the deregulation of air transport in the 1980s and the influx of highly skilled engineers enabled the emergence of Revenue Management and its rapid deployment, with techniques that were continuously refined and improved.

As a result, many modern Revenue Management practices trace their roots back to the airline industry: detailed inventory management, fare classes, network optimization, unconstrained forecasting, bid pricing, spill and spoilage measurement and sophisticated segmentation supported by powerful anti-dilution fences (Sunday rule, Advance Purchase Excursion fares, one-way pricing, etc.).

Airlines taught other industries to think in terms of opportunity value rather than simple occupancy rates, demand forecasting rather than budget-driven planning and to rely on their own data instead of placing excessive emphasis on competitor monitoring.

What have airlines learned from other industries?

But perhaps the most interesting part lies elsewhere.

While other industries have learned a great deal from airlines, the reverse is now equally true.

Hospitality, for example, has played a major role in simplifying the way pricing offers are presented. BAR and NRNR (Non-Refundable, Non-Cancellable) models allow customers to instantly understand the value of flexibility, thanks to indexed pricing and a constant price gap between the two products.

Where airline fare structures historically relied on dozens of complex restrictions, accommodation providers demonstrated that a simpler and more transparent offer could also deliver better performance.

Even today, airline models built around Fare Families are often less effective than their hospitality counterparts. The airline industry had to wait for the emergence of Branded Fares now the dominant model before finally drawing inspiration from hospitality practices.

Leisure parks, meanwhile, have developed a particularly advanced approach to monetizing the customer experience. Fast Passes, priority access, VIP experiences and premium products. Value creation is no longer based solely on the admission ticket but on the entire customer journey. Many airlines now draw inspiration from this approach to expand ancillary revenues: priority check-in, seat selection, diversified onboard offers and more.

Other industries have also moved ahead in areas such as personalization, CRM data utilization and the effective alignment of Marketing, Sales and Revenue Management.

These are areas where organizational silos can still be too prevalent in the transportation sector, leading to insufficient coordination: relatively ordinary special offers, for example, that are not always communicated or marketed effectively. Or endless Add-Ons that are poorly positioned and inadequately promoted.

Why will tomorrow’s Revenue Management be multi-industry?

The lesson is ultimately quite simple.

For twenty years, other industries tried to replicate airline best practices. Today, the most successful companies are no longer trying to copy a single industry. They borrow the best from each:

• From airlines: optimization discipline.
• From hospitality: offer simplicity.
• From leisure parks: experience monetization.
• From retail and e-commerce: customer knowledge and personalization.

Tomorrow’s Revenue Management will probably no longer be airline-based, hospitality-based, or ticketing-based. It will be multi-industry. In fact, it already is. That is why, at Revbell, we enjoy working across all of these industries. Each one enriches the expertise of our teams.