Decision support in online travel retailing

Online travel retailing is an e-commerce success story. Different retail models exist to sell travel products over the web. These models include online travel agencies, supplier websites, distressed inventory websites, reverse auction web sites, shopping bots, search engines, and portals. Online travel agencies, such as Expedia and Travelocity, are the most mature business accounting for more than half of online leisure travel sales. Online travel agencies acquire inventory from multiple airlines, hotels, car rental companies, cruise lines, and event organisers. They merchandise this inventory as standalone as well as packaged categories to online shoppers who benefit from a wide variety of products across multiple suppliers. In this paper, a decision support framework for an online travel agency is discussed. The framework includes disaggregate demand estimation, pricing and product display, marketing, revenue planning, and deal evaluation. The underlying Operations Research models is discussed along with challenges associated with data collection and implementation. The authors discuss the impact of online travel retailing on supplier yield management systems. Decision support models discussed are also applicable to online travel retailers other than online travel agencies. The decision support framework should serve as an exposition to the Operations Research opportunities in the emerging field of online travel retailing.