Comparison of Airline Co-Branded Credit Card Programs via Frequent Flyer Money Saver Analysis for Full-Service U.S. Carriers

Although airline alliances work fairly effectively for paid flight segments, passengers who want to redeem frequent flyer miles often encounter difficulties. Sometimes airlines demand an extensive amount of air miles to book requests for award seats to not only their partner airline customers but also their own customers. Furthermore, while the airline co-branded credit card award mile earnings and redemption rates fluctuate significantly between different airlines, passengers are not well informed about which airline co-branded credit card requires the minimum amount of credit card expenditure to fly with an award ticket to their desired travel destination. A more useful and practical system is necessary to fulfill passenger’s expectations to overcome the problems associated with earning and redeeming frequent flyer miles on flights via airline co-branded credit cards. Grounded in consumerism theory, this research acknowledges that buyers, relative to sellers, often lack important information as they seek to make purchases. As such, efforts to help consumers make more informed choices benefit not only consumers but also the wider marketplace. In the first part of this research, a quantitative model called the frequent flyer money saver (FFMS) analysis was used to compare the official credit cards offered by the leading carriers’ loyalty programs operating in the United States via simulation. In the second part, an exploratory structural equation model (SEM) was used to determine the FFMS ratio’s factors based on the route characteristics. According to the results, United Airlines outperformed other airlines in terms of FFMS ratio distribution, whereas Hawaiian Airlines held the lowest position. Regarding the SEM results, the route characteristics including market share and number of passengers carried were negatively associated with the FFMS ratio. Based on this dissertation’s findings, when compared with Hawaiian and Alaska Airlines, the members of big three airlines (Delta, American and United) offer significantly higher savings in aggregate to their customers with respect to redeeming miles for an award ticket. Tentative findings also suggest a potential relationship between route characteristics and the FFMS ratio that should be further explored

Dynamic packaging

Das Erfolgsmodell von Online-Tourismusunternehmen wird von zwei Faktoren bestimmt: vom Kunden und von der Technologie. Der Kunde repräsentiert die Nachfrage des Marktes und somit den Push-Faktor, die Technologie den Anbietermarkt und den Push-Faktor. Gemeinsam entscheiden sie über den Erfolg eines E-Business. Das «Dynamic Packaging» kombiniert beide Faktoren zu einem Maßnahmenbündel. Das Ziel ist ein auf Kundenbedürfnisse zugeschnittenes Produkt, das sich die neusten IT-Technologien zunutze macht. Der erste Abschnitt dieser Arbeit liefert einen Überblick der Tourismusindustrie, die aufgrund der neu verfügbaren Informationstechnologien einen signifikanten Wandel vollzogen hat. Die Veränderungen werden im Folgenden bezogen auf die unterschiedlichen Anbieter von Reisedienstleistungen und -produkten diskutiert. Diese Vorgehensweise soll nicht nur das spezifische Umfeld veranschaulichen, in dem die Anbieter agieren, sondern auch die Herausforderungen, mit denen sie konfrontiert werden. Die Akteure, die in Betracht gezogen werden, sind Fluggesellschaften, Hoteliers, Kreuzfahrtgesellschaften und Autovermietungsgesellschaften. Der Übergang von der Offline- zur Online-Präsenz hatte primär eine Disintermediation zur Folge. Die wachsende Nachfrage nach einer besseren Organisation und Integration der Informationsfülle führte später dann jedoch wieder zu einer Reintermediation des Produktangebots.Die Online-Reisebüros, die den erkennbaren Trend der Reintermediation adoptiert haben, stellen eine neue Zustellmethode für das Tourismusprodukt dar. Ihr Erfolg ist jedoch von der Mitwirkung aller Anbieter abhängig. Touristische Unternehmen nutzen normalerweise eine weit gefächerte Auswahl an Distributionskanälen. Diese können jedoch nicht ad Infinitum vermehrt werden. Die Alternativen werden deshalb sorgfältig durch das Management ausgewertet mit dem Ziel, die tangiblen und intangiblen Vorteile zu maximieren und zugleich die Kosten zu minimieren. Die hier vollzogene Analyse bezieht drei Entscheidungsebenen mit ein: die operationale, die taktische und die strategische. Dabei werden drei verschiedene Distributionskanäle einander gegenüber gestellt: traditionelle Reisebüros, eigene Webseiten der Anbieter und Online-Reisebüros. Um die Diskussion von Online-Reisebüros als Distributionskanal auch im Hinblick auf mögliche Chancen und Risiken zu vervollständigen, wird abschließend eine Kosten-Nutzen-Analyse aus der Kundenperspektive präsentiert.The success model of the e-tourism company could be defined as driven forward by two dominating forces: customer and technology. The customer, who works as the market pull factor and the technology as the push factor, both determine the e-business’s success. Dynamic packaging reflects the combination of these two factors: delivery of a highly customized product based on advanced information technologies. First section of the thesis gives an overview of the current tourism industry which has been significantly changed due to the emerging information technologies. The changes occurred in the last years are discussed separately for the various suppliers of the travel product. This should better illustrate the specific environment in which they operate as well as the challenges they face. The players taken into consideration include airlines, hotels, cruise lines and car rental companies. The transition from the offline to the online environment contributed in the first stage to the disintermediation process. Later, the need for the organization and integration of the information initiated a return to the reintermediation of the travel products. Online travel agencies, due to the reintermediation, present a new delivery channel for the travel product. Their success depends on a high participation level of the various tourism players. The tourism companies most usually use a portfolio of distribution channels. However the channels cannot be ad infinitum added as they emerge. The alternative choices will be carefully evaluated by the management to maximize the tangible and intangible benefits as well as to minimize the costs. The conducted analysis takes into consideration three decisions areas: operational, tactical and strategic. Every conducted analysis includes the comparison of three different distribution channels: the traditional agency, the own suppliers’ web page and the online travel agency. Finally, the cost/benefit analysis will be presented from the customer’s perspective to ensure the comprehensive presentation of Online Travel Agencies (OTA) as a distribution channel, taking into consideration the possible threads and opportunities

Organizational Structure and Pricing: Evidence from a Large U.S. Airline

Firms facing complex objectives often decompose the problems they face, delegating different parts of the decision to distinct subordinates. Using comprehensive data and internal models from a large U.S. airline, we establish that airline pricing is inconsistent with canonical dynamic pricing models. However, we show that observed prices can be rationalized as an equilibrium of a game played by departments who each have decision rights for different inputs that are supplied to the observed pricing heuristic. Incorrectly assuming that the firm solves a standard profit maximization problem as a single entity understates overall welfare actually achieved but affects business and leisure consumers differently. Likewise, we show that assuming prices are set through standard profit maximization leads to incorrect inferences about consumer demand elasticities and thus welfare

Revenue Management: Advanced Strategies and Tools to Enhance Firm Profitability

Much of the past research on revenue management (RM) has focused on forecasting and optimization models and, more recently, on adaptation of RM to the specific needs in various industries, such as restaurants, car rental, transport and even health care services. Surprisingly, although many industries have become increasingly customer-focused, the customer seems to have been relatively forgotten in this stream of research. Our intent in this monograph is to help explore the role of marketing in RM in more depth

Progress in information technology and tourism management: 20 years on and 10 years after the Internet—The state of eTourism research

This paper reviews the published articles on eTourism in the past 20 years. Using a wide variety of sources, mainly in the tourism literature, this paper comprehensively reviews and analyzes prior studies in the context of Internet applications to Tourism. The paper also projects future developments in eTourism and demonstrates critical changes that will influence the tourism industry structure. A major contribution of this paper is its overview of the research and development efforts that have been endeavoured in the field, and the challenges that tourism researchers are, and will be, facing

High tide, low price? Flooding alerts and hotel prices in Venice

This research explores the effects of High Tide alerts on hotel prices in Venice, a city that is vulnerable to the impacts of extreme climate events due to its fragile ecosystem and a long history of floods in the city center. By analyzing and combining price data from Booking.com with publicly available information on tides and weather, this study uses regression discontinuity design to test for changes in hotel prices when tide levels reach a critical threshold. The results offer insights into the sensitivity of hotel prices to weather alerts and provide valuable information on the potential impact of climate change on Venice’s tourism-driven economy, with implications for the cost–benefit analysis of activating protective barriers for lagoon protection

The Sharing Economy as an Equalizing Economy

Economic equality is often said to be the key problem of our time. But information technology dematerializes the world in ways that are helpful to the ninety-nine percent, because information can be shared. This Article looks at how one fruit of the information revolution—the sharing economy—has important equalizing features on both its supply and demand sides. First, on the supply side, the intermediaries in the sharing economy, like Airbnb and Uber, allow owners of housing and cars to monetize their most important capital assets. The gig aspect of this economy creates spot markets in jobs that have flexible hours and monetizes people’s passions, such as cooking meals in their home. Such benefits make these jobs even more valuable than the earnings that show up imperfectly in income statistics. The law and economics analysis of Hernando de Soto has shown how creating property rights and more formal markets can help those of modest means in the developing world. The sharing economy performs a similar function for people of modest means in the developed world. Second, on the demand side, the sharing economy also creates gains for consumers that largely go to the ninety-nine percent. Airbnb finds them cheaper accommodations in places that may have been unaffordable. But the advantages go beyond price. Summoning a ridesharing car almost anywhere with the press of a smartphone is a much closer approximation of having a chauffeur—a hallmark of wealth—than hailing a taxi. The law and economics analysis of Ronald Coase shows how replacing such physical agents with online agents redounds largely to the benefit of those with modest incomes. If the sharing economy has equalizing as well as efficiency features, regulations must be careful not to disturb them. But because the sharing economy permits new entry into markets, incumbents will respond with new regulatory efforts to hamper it. This Article provides a taxonomy of the different kinds of regulation to help preserve the equalizing features from being impaired. The Article ends by showing how the sharing economy more generally problematizes the conventional story of growing material inequality. The dematerialization of the world provides greater opportunities for broadly shared consumption, like that on Facebook, and improves working conditions, particularly for the middling classes. Only by taking account of these trends can we understand the changing relative material conditions of people