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Carnival Optimizes Revenue and Inventory Across Heterogenous Cruise Line Brands

Carnival Corporation & plc identified the need for a cutting-edge revenue management system; however, existing solutions from the airline and hospitality industries were not compatible with the idiosyncrasies of the cruise domain. As such, the company partnered with revenue analytics to build a complete revenue and inventory management system to meet its requirements. Yield optimization and demand analytics (YODA) is a system that leverages a unique quadratic programming model to jointly determine cruise prices and allocate cabin inventory to multiple cruises (e.g., 14-day and 7-day lengths) offered simultaneously on a given ship. The optimization inputs come from several machine learning algorithms that predict demand. YODA combines these algorithms with an elasticity model derived from an exponential curve to represent the unique price-sensitivity behavior observed in the cruise industry. The system generates millions of price recommendations each day and has been used to price voyages on 65 Carnival ships, approximately one quarter of the ships in the entire cruise industry, since December 2017. During A/B testing, YODA generated a 1.5%–2.5% incremental uplift in net ticket revenue, which is a significant revenue increase because Carnival was a Fortune 300 company in 2019.

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Informasi Detail

Judul Seri

INFORMS JOURNAL ON APPLIED ANALYTICS; Vol.51 No.1 January-February 2021

No. Panggil

-

Penerbit

: .,

Deskripsi Fisik

p. 26 - 41

Bahasa

English

ISBN/ISSN

-

Klasifikasi

-

Tipe Isi

-

Tipe Media

-

Tipe Pembawa

-

Edisi

-

Subjek

MACHINE LEARNING
OPTIMIZATION
REVENUE MANAGEMENT
QUADRATIC PROGRAMMING
CART
CRUISE LINES
EDELMEN AWARD

Info Detail Spesifik

https://doi.org/10.1287/inte.2020.1062

Pernyataan Tanggungjawab

Justin Beck, John Harvey, Kristina Kaylen, Corrado Sala, Melinda Urban, Peter Vermeulen, Norman Wilken, Wei Xie, Dan Iliescu, Pratik Mital

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