In this paper we present a novel approach to the dynamic pricing problem for hotel businesses. It includes disaggregation of the demand into several categories, forecasting, elastic demand simulation, and a mathematical programming model with concave quadratic objective function and linear constraints for dynamic price optimization. The approach is computationally efficient and easy to implement. In computer experiments with a hotel data set, the hotel revenue is increased by about 6% on average in comparison with the actual revenue gained in a past period, where the fixed price policy was employed, subject to an assumption that the demand can deviate from the suggested elastic model. The approach and the developed software can be a useful tool for small hotels recovering from the economic consequences of the COVID-19 pandemic.

Basic concepts and brief description of revenue management models and decision tools in the hotel business are presented. An overview of the relevant literature on dynamic pricing, forecasting methods and optimization models is provided. The main ideas of the authors’ customized revenue management method for the hotel business are presented.

We study the problem of scheduling n non-preemptive jobs on m unrelated parallel machines. Each machine can process a specified subset of the jobs. If a job is assigned to a machine, then it occupies a specified time interval on the machine. Each assignment of a job to a machine yields a value. The objective is to find a subset of the jobs and their feasible assignments to the machines such that the total value is maximized. The problem is NP-hard in the strong sense. We reduce the problem to finding a maximum weight clique in a graph and survey available solution methods. Furthermore, based on the peculiar properties of graphs, we propose an exact solution algorithm and five heuristics. We conduct computer experiments to assess the performance of our and other existing heuristics. The computational results show that our heuristics outperform the existing heuristics.