Mechanism design in an integrated approach towards revenue management: the case of Empress Cruise Lines

This paper investigates an integrated form of revenue management through the case of Empress Cruise Lines (ECL). The case highlights a multidisciplinary approach towards how demand and supply factors should be integrated in the form of four decision sets in revenue management decisions - the value s...

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Bibliographic Details
Published inThe Service industries journal Vol. 31; no. 3; pp. 469 - 482
Main Authors Ng, Irene, Yip, Nick K.T.
Format Journal Article
LanguageEnglish
Published London Routledge 01.02.2011
Taylor & Francis Ltd
Subjects
Cruise lines
Forecasting
Integrated approach
mechanism design
pricing
Revenue management
Studies
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Summary:This paper investigates an integrated form of revenue management through the case of Empress Cruise Lines (ECL). The case highlights a multidisciplinary approach towards how demand and supply factors should be integrated in the form of four decision sets in revenue management decisions - the value set, the segmentation set, the sensitivity set and the forecasting/allocation set. Also, the use of mechanism design allows the firm to separate markets for better forecasting of revenue from each segment. The case also shows that segments could be incentivized to behave differently, and to behave in alignment with ECL's policies so that capacity could be optimally allocated and revenue maximized.
ISSN:0264-2069
1743-9507
DOI:10.1080/02642060902838303