Dynamic Pricing

Indian railways is one of the world’s largest railway networks. It serves millions of passengers daily and it has an enormous route length of more than 68,043 km and running track length of 102,831 km operating many thousands of regular trains over 7,325 stations, with an employee strength of more than 1.3 million, making it the world’s tenth-largest employer. The operations of railways certainly are one of the bigger, more varied, and highly complex of any across the world

With increased population, The Railways is facing increased competition from other modes of transport which makes it important for them to ensure sustainable growth and profitability.

Traditionally, Railways have relied on fixed pricing models that are not effectively capturing fluctuations in demand and market dynamics. This has led to missed opportunities for revenue generation. However, with the introduction of AI-based dynamic pricing, railways can make data-driven decisions that will lead to improved financial outcomes.

Dynamic Pricing

Dynamic pricing works by continuously collecting and analysing large volumes of data, including historical ticket sales, passenger preferences, and market trends. By leveraging AI algorithms and data analytics, the system can identify patterns and correlations within the data, allowing it to make accurate predictions about passenger behaviour and their willingness to pay for tickets.

AI-based dynamic pricing has the potential to greatly benefit the Indian Railways by maximizing its earnings. This innovative approach involves analysing data and trends to identify the optimal ticket prices that passengers are willing to pay. By considering various factors such as demand, time of travel, and market conditions, it can accurately determine the most suitable prices.

Implementing AI-based dynamic pricing requires robust technological infrastructure and data analytics capabilities. Additionally, a comprehensive pricing strategy will be needed, considering factors beyond demand, such as competitor pricing and customer segments.

Sciative’s dynamic pricing tool Viaje.ai offers AI-based dynamic pricing and the ability to adapt to changing conditions in real-time. As demand fluctuates throughout the day, week, or year, Viaje.ai can adjust ticket prices accordingly, ensuring railways to maximize their revenue potential.

For example, during peak travel periods or high-demand routes, Viaje.ai will suggest higher ticket prices to capitalize on increased passenger willingness to pay. Conversely, during off-peak times or on less popular routes, it will recommend lower prices to attract more passengers and fill seats that might otherwise remain under-utilized.

  • Real-time Demand Analysis

Dynamic PricingIn Viaje.ai, it analyses real-time data on passenger preferences, booking patterns, and historical trends, thus capturing the dynamic nature of customer demand for railway services. It can gain valuable insights into demand fluctuations and adjust ticket prices accordingly.

This real-time analysis ensures that prices align with the current market conditions, maximizing revenue potential. Traditional pricing models often fail to achieve this level of understanding and responsiveness to market dynamics.

  • Demand Forecasting and Optimization

Viaje.ai analyse vast amounts of historical and real-time data to accurately forecast passenger demand for different routes and travel periods. By considering variables such as seasonality, holidays, and events, the ticket prices will be dynamically adjusted based on anticipated demand.

This optimization ensures that ticket prices align with market conditions, maximizing revenue potential while minimizing unsold seats. AI-based demand forecasting enables the Indian Railways to respond effectively to fluctuations in passenger demand and adjust pricing accordingly.

  • Efficient Resource Allocation

Dynamic PricingBy running trains at optimum capacity during peak and off-peak periods, the Indian Railways can reduce operational costs and increase profitability. Viaje.ai can help optimize resource allocation within the Indian Railways. It maximizes occupancies by adjusting prices based on seat availability and demand.

By identifying low-demand periods and routes, Viaje.ai offers attractive pricing incentives like cut seat bookings to attract more passengers, thereby increasing the overall occupancy rate.

  • Preferred Seating Preferences

Viaje.ai enables passengers to choose their preferred seating location in different prices. It can classify the coaches and offer different prices depending on the demand and availability.

Passengers willing to pay more for AC1, AC2 or seats in specific coaches will have the option to do so. Viaje.ai can apply flexible dynamic prices in all the coaches which will change as per demand and market conditions. This flexibility will not only provide a better travel experience but also generate additional revenue for the railways.

  • Preventing Revenue Leaks

Revenue leaks are a common challenge for railway systems. In Viaje.ai, It continuously analyse data and patterns to identify potential revenue leak points, such as under-pricing and overpricing of tickets.

For example, if a ticket is over-priced at ₹1500 but the demand for the same is less. It will lead to underutilization of capacity and cause under selling of seats. To avoid this, Viaje.ai will predict the demand beforehand and price the tickets for ₹1000 each so that the demand can be redistributed from peak periods.

By detecting and addressing these leaks in real-time, the Indian Railways can prevent revenue loss and improve financial performance. This proactive approach helps the Indian Railways maintain a robust revenue system and enhance overall profitability.

AI-based dynamic pricing has the potential to revolutionize the Indian Railways by maximizing its earnings and improving customer satisfaction. By analysing data and trends, this approach can enable Railways to determine the most affordable ticket prices based on factors such as demand, time of travel, and market conditions.

Leveraging AI algorithms and data analytics allows for the optimization of ticket prices, improved revenue management, and the delivery of a more personalized experience to passengers. It can unlock new levels of profitability and customer satisfaction for the Indian Railways.

Book a Free Demo! of our automated retail solutions or contact our optimization experts at info@sciative.com.

To know more about our AI-powered dynamic pricing tool BRIO, reach out to us.

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