Hotel room-inventory management: an overbooking model

Toh, Rex S.; DeKay, Frederick

doi:10.1016/s0010-8804(02)80044-1

Cited by 36 publications

(24 citation statements)

References 11 publications

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“…For particular segments such as meeting business, attrition condition contract clauses served as an insurance securing the dedicated inventory. This is in line with Vinod (2004;, Bobb and Veral (2008), Harewood (2006), Toh and de Kay (2002) and Carroll and Noden (2010). However, asserted distribution channels as a capacity allocation tool was only indirectly confirmed in this research.…”

Section: Resultssupporting

confidence: 79%

How economic crisis affects revenue management: the case of the Prague Hilton hotels

Gehrels

Blanar²

2013

Research in Hospitality Management

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Section: Resultssupporting

confidence: 79%

How economic crisis affects revenue management: the case of the Prague Hilton hotels

Gehrels

Blanar²

2013

Research in Hospitality Management

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“…Toh [38] proposes a model that helps hotel managers to establish optimal booking levels systematically by balancing the opportunity cost of empty rooms with the adverse consequences of over selling. Toh and Dekay [39] also emphasize the importance of that balance in setting customer service levels to solve hotel overbooking problems. Koide and Ishii [40] maximize expected total sales by allowing customers paying the regular rate to make cancellations but not those with discounted rates.…”

Section: Hotel Overbooking Strategymentioning

confidence: 99%

Hotel Overbooking and Cooperation with Third-Party Websites

Dong

Ling

2015

Sustainability

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Hotels cooperate with third-party websites to enhance their competitive position and attain sustainable development in the era of e-commerce. Furthermore, hotel managers overbook to hedge against last-minute cancellations and customer no-shows. This paper discusses pricing and overbooking strategies of a hotel in the context of cooperation with multiple third-party websites and analyzes how these strategies influence the cooperation process. The increase in profits resulting from the overbooking strategy is also examined. A model of a Stackelberg game between the hotel and third-party websites and a Nash game among the third-party websites are developed to analyze the process. Results indicate that the compensation coefficient has a slight influence on hotel pricing strategy, but causes a sharp decrease in overbooking level. As the hotel demands to lessen the probability of denying under higher compensation rate, the third-party websites would exert less sales effort to reduce the demand of online customers. Results also show that under a given market demand, hotel effort only serves to redistribute market shares among the hotel and third-party websites, without influencing hotel pricing and overbooking decisions. Specifically, the market shares of the third-party websites decrease in the effort level of the hotel resulting from an increase in the hotel market share. Finally, in the numerical example where one hotel and two websites are analyzed, hotel overbooking strategy improves hotel profit by 4.20%, whereas profit improvements for Websites 1 and 2 are as high as 5.26% and 5.21%, respectively. Managerial implications of the study are also provided.

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“…But, as argued by Toh and DeKay (2002), even if guided by effective room-management software, hotels' managers are constantly forced to override the computer, and be guided by their experience and competences. Although mathematical models can be useful, no overbooking model can replace the judgment that the person engaged in a real and problematic circumstance can make.…”

Section: The Traditional Overbooking and Its Consequencesmentioning

confidence: 99%

Defining a sustainable overbooking approach in the hospitality industry

Fasone

Faldetta

2013

IJSSM

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Tourism industry is characterised by a growing uncertainty about volume of demand and relationships with tourists. Hotels often practice overbooking to face uncertainty, seeking to maximise rooms' occupancy rates acting on the reduction of uncertainty on demand. At the same time overbooking is often correlated to an increase of uncertainty in relationships because it is very difficult to predict how different customers might react facing overbooking. This article aims to compare two different overbooking approaches: the traditional overbooking approach and an alternative one, called fair and transparent overbooking, according to which customers are made aware in advance of the possibility of overbooking. The main objective is to understand what are the consequences of traditional overbooking, both positive and negative, and then to figure out if the introduction of a new overbooking formula could alleviate the negative consequences, while maintaining the benefits, making it more sustainable from a social, relational and economic point of view. The theoretical analysis is supported by an empirical survey which aims to verify how overbooking is common, for which reasons is mainly practised by hotels and what are the main benefits and problems. Finally, the survey aimed to explore the possibility of practicing the fair and transparent overbooking.

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Hotel room-inventory management: an overbooking model

Cited by 36 publications

References 11 publications

How economic crisis affects revenue management: the case of the Prague Hilton hotels

How economic crisis affects revenue management: the case of the Prague Hilton hotels

Hotel Overbooking and Cooperation with Third-Party Websites

Defining a sustainable overbooking approach in the hospitality industry

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