A Dynamic Duo: How the Synergy Between Inventory and Revenue Management Systems Can Reimagine Innovation for the Rail Industry

Rémi Habfast

28 February 2025

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The rail industry is at the precipice of transformation. With more and more private operators entering rather monopolized markets, it’s a need of the hour for legacy rail companies to innovate and keep up with modern passengers’ needs.

While a robust Revenue Management System (RMS) alone could help transportation companies get an edge over their competitors, a combination with an integrated Inventory and Ticketing Platform is very powerful. When sales, inventory, CRM, and RM are unified in a single system, it enables innovation and eliminates data silos, delays due to poor integration, and inconsistent passenger experiences.

The dynamic duo of an Inventory & Ticketing platform combined with an RMS opens the doors to deliver streamlined experiences that the passengers of today expect.

My 14 years in the rail industry have provided a unique perspective on its evolving challenges. What I’ve consistently witnessed is that passenger transport optimization is often approached in ‘silos.’ Revenue Management, scheduling, maintenance, and disruption management are handled by disparate teams using isolated tools. This fragmented approach inevitably leads to suboptimal solutions, as these crucial aspects are deeply intertwined.

For example, while optimizing load factors can be achieved through price adjustments, it also necessitates considering capacity additions, which, in turn, directly impact maintenance planning. This is what made us at Wiremind realize the need for a modern IT system that can seamlessly integrate all the functionalities required to optimize passenger transport: prices, schedule, offers, connections, etc. Hence, PAXONE was created to solve this problem.

To follow up on our previous article detailing the advantages of integrated rail systems, this article focuses specifically on the benefits of Revenue Management integration. It explores multiple ways in which a solution like PAXONE can amplify revenue for rail operators.

What can you gain?

By unifying an Inventory and Ticketing platform with Revenue Management, transport operators can unlock powerful capabilities that boost efficiency and revenue. Here’s what they stand to gain:

• Easy integration and implementation: The unified system design means minimal setup effort. Since both systems are designed to work together, integration is streamlined – there’s no need for complex technical configurations or third-party solutions. You can start using the system right away, with features being activated through simple environment settings rather than requiring extensive IT involvement.

• Accurate demand prediction: By combining historical booking data with real-time insights from the inventory and ticketing system, your RMS can make more precise demand forecasts. This includes analyzing look-to-book ratios and tracking search requests for routes or dates that are not open for sales yet, providing valuable data about potential passenger interest even before sales open for specific periods.

• Automation and reduced errors: Automation of processes like inventory adjustments and fare updates, reducing manual work and human error. For example, when updating stations or route details, changes are automatically synchronized across all integrated systems – from revenue management to customer-facing interfaces. This ensures data consistency, saves time, and eliminates the risk of discrepancies that could arise from manual updates across multiple platforms.

• Simplified Account Management: Implementation and maintenance are streamlined through a single point of contact for customer support, eliminating the need to coordinate between multiple vendors and support teams. This centralized approach reduces communication overhead, speeds up issue resolution, and ensures consistent service quality across your entire ecosystem.

A step ahead with innovation

Let’s take the example of a car. Consider RM to be the engine of the car, and the exterior of the car as the IT environment. An engine has to be plugged into an exterior to make it fully work. If there is an old car with an old engine, we can always have the engine replaced. But the best way to do this is to pair a modern engine with a modern car.

This is how we can look at the RMS and the commercial IT landscape. If you use a modern RMS like CAYZN, you will need a modern IT system like PAXONE that is designed to work with this RMS. On the surface, it seems like a very simple explanation, but if your inventory system is not designed to work with the modern RMS, the advantages cannot be reaped. If both systems are not working together with the same vision, it’s hard to take innovation forward the way we want.

When you integrate two modern systems like CAYZN and PAXONE, this synergy gives additional benefits to the already existing advantages like:

• Advanced RM functionalities: Dedicated inventory system developments unlock advanced functionalities such as continuous pricing, ancillary optimization, overbooking management, and more.

• Innovative Cross-System Features: Take advantage of features that require Revenue Management systems, inventory, and CRM to work in harmony, including post-booking optimization, flexible departure-time fares, and schedule optimization.

• Quick Turnaround Time: Coordinated roadmaps between the two systems by the same provider allow implementation of changes way faster in comparison to industry standards.

Practical examples

While there can be countless innovative use cases that can come out of each integration, there are a few that stand out. Let’s explore them:

Post-booking Sales

Post-booking sales allow transport operators to offer targeted upgrades and ancillary products to customers after their initial booking. For example, a passenger with a standard-class ticket might receive an email offering a first-class upgrade at an optimized price based on current availability.

This demonstrates how both systems can work together effectively – RMS analyzes booking data to determine optimal pricing, while the Inventory and Ticketing system handles the customer communication and booking modifications through its CRM capabilities. This integrated approach helps maximize additional revenue while maintaining a smooth customer experience.

Network pricing

Network pricing allows the optimization of connection prices according to the connecting O&D’s true demand, whose price sensitivity is usually quite different from its individual segments.

For example: Without connection optimization, a trip from Bordeaux to Brussels with a stopover in Paris would cost 250€—the sum of 150€ from Bordeaux to Paris and 100€ from Paris to Brussels. This unoptimized connection price is unlikely to meet the demand for such a long trip with a stopover.

With connection optimization, a similar service could be priced by taking the true demand of the Bordeaux – Bruxelles O&D with stopover which, due to its long travel time and its stopover, is likely to be more price sensitive than the short Bordeaux – Paris and Bruxelles – Paris direct business O&Ds.

Assuming a service on one of these segments has a low load factor forecast (ie. discounted seats for connecting trips has a very low opportunity cost), an optimal price of 150 – 200 € for the whole Bordeaux – Bruxelles connecting trip, for instance, could be more optimal in terms of revenue. Our algorithms will find the exact optimal price in each situation while making sure that the connecting price stays higher than each price of the individual segments it contains.

Continuous Pricing

A generalization of the bucket (or “price point”) concepts allows:

• To maintain the bucket system’s key advantage of automatic closure when availability at a price level is depleted

• To enable buckets to offer continuous price values

In practical terms, each bucket receives a floor price, a ceiling price, a percentage that may vary based on days until departure, and authorization/availability values. The bucket price (for a given fare) is calculated as: floor price + %(D-X)*ceiling price.

Transport operators can use this system in multiple ways:

This structure greatly increases pricing flexibility, allowing operators to:

• Create pricing strategies based on days until departure, rather than on future (unknown) sales

• Implement decreasing price trajectories (e.g., when price sensitivity increases near departure)

• Establish optimal fixed prices per train without fixed price-point constraints

To fully leverage continuous pricing innovation capabilities, rail operators must either redesign their inventory systems or adopt PAXONE—a platform with modern architecture designed specifically for this purpose.

Through seamless integration between Revenue Management and Inventory systems, Wiremind empowers operators to maximize the benefits of advanced revenue management capabilities.

Stay tuned for our next blog post in this series on Divided vs. Unified Rail Systems, where we’ll walk you through multiple ways in which integrated systems can benefit from a CRM point of view.

Reach out to our product experts at [email protected] if you’d like a demo of our Inventory and Ticketing Platform, PAXONE—powered by our industry-leading Revenue Management solution, CAYZN.

Try out our OSDM API first-hand through our exclusive sandbox environment here.