Abstract:
A method for comparing average travel costs in intersected markets is disclosed and comprises a method for measuring and comparing average costs incurred by buyers of travel, where the average cost of a specified supplier is derived from multiple markets, and the average cost from other suppliers is derived from the other suppliers&#39; costs in the same markets as those used to derive the specified supplier&#39;s average costs.

Description:
TECHNICAL FIELD  
       [0001]     Embodiments of the present invention relate to accounting for travel costs, and enabling effective comparison between travel options. More particularly, embodiments of the present invention relate to a method for comparing average travel costs in intersected markets, for example, with respect to airlines, hotels, rental cars, or other travel-related businesses and the expenses associated with their use.  
       BACKGROUND OF THE INVENTION  
       [0002]     Corporations spend significant amounts of money on travel suppliers, such as airlines and hotels. Managers often seek reports that quantify the amount spent on airlines or hotels by supplier. For purposes of description, expenses associated with airline travel will be reviewed. Often these reports provide an average unit cost or price associated with each supplier, such as:  
                                                           TABLE 1                           Airline-level report                Airline   Spend   Segments   Avg. Segment Price                            AA   $250,000   500   $500           BA   $300,000   150   $2,000                      
 
         [0003]     Table 1&#39;s data is typically obtained by summing all the spend and all the segments (or other similar units of volume) on each airline, and deriving an average unit cost for each supplier by dividing total spend by total units. The reader of this table will note a large differential in the average unit price between the two airline suppliers, but will not know if the two airlines compete in any, some or many common markets.  
                                                           TABLE 2                           City Pair-Airline report            City Pair   Airline   Spend   Segments   Avg. Segment Price                    NYCLON   AA   $100,000   40   $2,500       NYCLON   BA   $200,000   100   $2,000                  
 
         [0004]     Table 2 shows the average cost by airline in each market, but because many companies buy airfares in hundreds or thousand of city pair markets, it is often not practical to use this level of detail to understand how much more cost effective one airline may be versus another.  
         [0005]     It would be beneficial to have a method for comparing average costs between a specified travel expense, such as related to airline travel, such as for a predetermined airline, e.g., American Airlines, and the average costs paid to other airlines in the same markets used to report the American Airlines average price.  
         [0006]     A report that compares a specified airline&#39;s average cost with the average costs of other airlines in the same markets would allow managers to more easily discern the general cost effectiveness of the specified airline. Similarly, such a tool would be beneficial for other travel related expenses, such as hotel, rental cars or the like.  
         [0007]     Further limitations and disadvantages of conventional, traditional, and proposed approaches will become apparent to one of skill in the art, through comparison of such systems and methods with the present invention as set forth in the remainder of the present application with reference to the drawings.  
       BRIEF SUMMARY OF THE INVENTION  
       [0008]     A first embodiment of the present invention provides a method for comparing average travel costs in intersected markets.  
         [0009]     These and other advantages and novel features of the present invention, as well as details of an illustrated embodiment thereof, will be more fully understood from the following description and drawings. 
     
    
     BRIEF DESCRIPTION OF SEVERAL VIEWS OF THE DRAWINGS  
       [0010]      FIG. 1  is a flow chart relating to an embodiment of the invention. 
     
    
     DETAILED DESCRIPTION OF THE INVENTION  
       [0011]     The description below is based on using airline data. One skilled in the art will understand how the methods and systems described herein could be easily converted and applied to hotel data, car rental data, or other travel-related data. The invention is therefore directed to a method and system wherein travel related expenses can be effectively compared and evaluated to facilitate making decisions on the use of travel related business and associated costs.  
         [0012]     As shown in  FIG. 1 , the invention may be implemented via a method, which in turn may be implemented via software or in other suitable manners. A software program may provide an effective system for tracking and evaluating travel related expenses. The method may include a step at  100  of providing a set of intersected city pair markets, which are served by a predetermined travel related business, and at least one other related travel business, such as a predetermined airline and at least one other airline. An average price for a predetermined cit pair market is provided for each of the predetermined airline and the at least one airline at  102 . Having this information, the difference between the average price for the predetermined airline and the at least one other airline is derived at  104 . With this information, the system may provide an indication of the difference between the average price for the predetermined airline and the at least one other airline to evaluate travel expense alternatives for the set of intersected city pair markets at  106 .  
         [0013]     For a further understanding of the invention, the following example related to airline travel is set forth. As an example, raw travel data from a spend category, such as airlines (aka “air”) is assembled into a data table with the following structure as an example:  
                                                         TABLE 3                                   City Pair   Airline   Spend   Segments                                        NYCLON   AA   $100,000   40           NYCLON   BA   $200,000   100           ORDSFO   AA   $2,000   2           ORDSFO   UA   $15,000   20           CLEORD   AA   $50,000   100           CLEORD   CO   $30,000   100           CLEORD   UA   $20,000   75                      
 
         [0014]     In Table 3 above, if the Specified Airline is AA, then the NYCLON OA is BA; the ORDSFO OA is UA; and in CLEORD the OA is derived by combining the data from CO and UA.  
         [0015]     In an embodiment, the user may set a minimum amount of air spend or air volume (e.g., segments) for preferably both the specified airline (SA) and the other airlines (OA). In Table 3 above, if the Specified Airline is AA, then the NYCLON OA is BA; the ORDSFO OA is UA; and in CLEORD the OA is derived by combining the data from CO and UA. These minimums will be used to determine the set of individual city pair markets which comprise the intersected set of markets.  
         [0016]     A software program to implement the methods may find those city pairs where both conditions are true: 
    1. The spend or volume on the SA meets or exceeds the minimum, and     2. The spend or volume on the sum of all the OA&#39;s meets or exceeds the minimum.    
 
         [0019]     These city pairs become the intersected set of markets for the Specified Airline (SA), and now must be further processed. Although the setting of minimums to arrive at the desired intersected set of city pair markets in this manner may be helpful to larger organizations with significant spending on travel related expenses, it should also be understood that it would be possible to implement the method without setting such minimums. In an example, assume the minimum is 10 segments for both the SA and OA for illustrative purposes below:  
         [0020]     A new table is created with preferably the equivalent form of:  
                                                                             TABLE 4                       Intersected   Specified   SA&#39;s   SA&#39;s   SA&#39;s   OA&#39;s   OA&#39;s   OA&#39;s       City Pairs   Airline   Spend   Segs   ASP   Spend   Segs   ASP                                NYCLON   AA   $100,000   40   $2,500   $200,000   100   $2,000       CLEORD   AA   $50,000   100   $500   $50,000   175   $286       Totals   AA   $150,000   140   $1,071   $250,000   275   $909                  
 
         [0021]     The method, implemented via software for example, may then derive the Average Segment Price (ASP) in each row by dividing the row&#39;s spend by the row&#39;s segments (segs); once for the specified airline&#39;s data and once for the OA&#39;s data.  
         [0022]     There are also several methods to weight the OA&#39;s average segment prices if desired. One possible method could use the SA&#39;s city pair&#39;s share of spend relative to the SA&#39;s total spend; while another method could use the SA&#39;s city pair&#39;s share of segments relative to the SA&#39;s total segments. Other methods of weighting the derived segment prices are contemplated. Such weighting again may be helpful under circumstances, but also may not be necessary to implementing the methods. The example below will use the share of SA&#39;s spend method to weight the OA&#39;s average segment prices.  
         [0023]     1. Therefore, the method may be implemented, such as by software, to find the share of each intersected city pair&#39;s SA spend relative to the SA&#39;s total spend. Using the table above, the software derives the following table:  
                       TABLE 5                       Intersected City Pair   Specified Airline   SA&#39;s Spend Share                   NYCLON   AA   67%       CLEORD   AA   33%                  
 
         [0024]     2. Each record may then be appended with a value that represents the difference, in this case the relative difference, in Average Segment Prices between the SA and the OA. Alternatively, the actual or absolute difference in average price could be determined. Using the data from Table 4 and a simple math operation produces:  
                           TABLE 5a                                   OA&#39;s ASP is (Better)                   Worse Than SA&#39;s       Intersected City   Specified   SA&#39;s Spend   ASP by (as % of       Pair   Airline   Share   SA&#39;s ASP)                   NYCLON   AA   67%   (20%)       CLEORD   AA   33%   (15%)                  
 
         [0025]     3. The two numerical values in each record are multiplied together and then summed for the Specified Airline, and stored in a table, such as:  
                       TABLE 5b                               OA&#39;s Weighted ASP       Intersected City Pair   Specified Airline   Differential                   NYCLON   AA   (13%)       CLEORD   AA    (5%)           Total Wtd. ASP Diff.   (18%)                  
 
         [0026]     4. The SA&#39;s Average Segment Price for the set of intersected city pairs is combined with the Total Weighted ASP Differential value to produce the OA&#39;s Weighted Average Segment Price for the same set of intersected city pairs:  
                           TABLE 6                           SA&#39;s Average                   Segment Price   OA&#39;s Total       Specified   for the Intersected   Wtd. ASP   OA&#39;s Wtd. ASP for the       Airline   City Pairs   Diff.   Intersected City Pairs                   AA   $1,071   (18%)   $878                  
 
         [0027]     The software repeats the steps above for a plurality of Specified Airlines. It may then produce a table of the equivalent form such as:  
                                                     TABLE 7                                   OA&#39;s   SA&#39;s ASP           SA&#39;s Average       Wtd. ASP   is Better           Segment Price   OA&#39;s   for the   (Worse)       Specified   for the Intersected   Total Wtd.   Intersected   than OA&#39;s       Airline   City Pairs   ASP Diff.   City Pairs   ASP by                                AA   $1,071   (18%)   $878   ($193)       BA   $2,430   16%   $2,819   $389       CO   $438    5%   $460    $22       DL   $456    (7%)   $424    ($32)                  
 
         [0028]     By multiplying the number of segments associated with each Specified Airline&#39;s Intersected City Pairs and the amount by which the SA&#39;s ASP is better or worse than the OA&#39;s ASP, a savings or loss can be calculated for each SA. The method or software may produce a table using the equivalent form of:  
                           TABLE 8                                   Savings Gained           SA&#39;s ASP       Or (Lost) by           is Better   SA&#39;s Segment   Using the SA           (Worse)   Volume in   in the SA&#39;s       Specified   than OA&#39;s   Intersected   Intersected       Airline   ASP by   City Pairs   Markets                   AA   ($193)   140   ($27,020)       BA   $389   125   $48,625       CO    $22   400    $2,750       DL    ($32)   600   ($19,200)                  
 
         [0029]     While the invention has been described with reference to certain embodiments, it will be understood by those skilled in the art that various changes may be made and equivalents may be substituted without departing from the scope of the invention. In addition, many modifications may be made to adapt a particular situation or material to the teachings of the invention without departing from its scope. Therefore, it is intended that the invention not be limited to the particular embodiments disclosed, but that the invention will include all embodiments falling within the scope of the appended claims.