Chapter 3

Tactics of Revenue Management

Competencies

1. Understand Elasticity of consumer’s demand in cost allocation
2. Identify Revenue Margin when Demand is inelastic or elastic in duration control
3. Describe Hurdle Rate, Stay Through, Close to Arrival, Minimum Stay, Displacement

Outlines:

Figure 1: Inelastic demand and revenue margin with Y axis.

Figure 2: Elastic Demand and Revenue margin with X axis.

Figure 3: Hurdle rate at the joint between Revenue Margin and Average Cost

Figure 4: Sell Through

Figure 5: Close to Arrival

Figure 6: Minimum Stay