In practice, revenue management has
meant setting prices according to predicted
demand levels so that price-sensitive customers
who are willing to purchase at offpeak
times can do so at favorable prices, and
price-insensitive customers who want to
purchase at peak times likewise can do so.
The application of revenue management has
been most effective when it is applied to
operations that have relatively fixed capacity,
predictable demand, perishable inventory,
an appropriate cost structure, varying
customer price sensitivity, and time-variable
demand (Kimes 1989; Cross 1997). Those
attributes are generally found in some form
or another in the spa industry.