Greyhound to mimic airlines and charge more during peak travel periods
Photo Credit: A Greyhound bus breaks down in the desert on the way to Los Angeles. Flickr / Eva
Skift Take
It was only a matter of time before bus companies caught on to airlines’ profit-driving ways, but price plays a large factor for travelers deciding between the two so Greyhound would be foolish to match airlines’ peak prices.
Greyhound, the iconic U.S. bus brand, has turned to pricing models used by the airline industry as it seeks a ticketing system capable of boosting profitability by charging more for travel during peak periods.
FirstGroup Plc, the U.K. company that owns Greyhound, will spend as much $40 million on computerized yield-management technology to replace Greyhound’s flat-rate charging plan, and has engaged a U.S. carrier to help with the design, Chief Executive Officer Tim O’Toole said.
“No longer will a trip on Greyhound cost the same on July 17 as the day after Thanksgiving,” O’Toole said in a telephone interview from London. “Pricing will be much more dynamic.”
Yield management was introduced in the airline business in the 1980s, when Robert Crandall, CEO of American Airlines, began employing mathematicians to develop models able to predict demand during given time periods and price tickets accordingly. It has since become a critical tool for most of the world’s ca
