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A Stochastic Approach To Hotel Revenue Management Considering Multiple-Day Stays

Author

Listed:
  • SHUQIN LIU

    (School of Economics and Management, Beihang University, Beijing 100083, China)

  • KIN KEUNG LAI

    (Department of Management Sciences, City University of Hong Kong, Tat Chee Avenue Kowloon, Hong Kong, China;
    College of Business Administration, Hunan University, Hunan 410082, China)

  • JICHANG DONG

    (School of Management, Graduate School, Chinese Academy of Sciences, Beijing 100080, China)

  • SHOU-YANG WANG

    (Institute of Systems Science, Academy of Mathematics and Systems Sciences, Chinese Academy of Sciences, Beijing 100080, China;
    Graduate School of Systems and Information Engineering, University of Tsukuba, Tsukuba, Ibaraki 305-8573, Japan)

Abstract

We present a stochastic optimization model for hotel revenue management with multiple-day stays under an uncertain environment. Since a decision maker may face several scenarios when renting out rooms, we use a semi-absolute deviation model to measure the risk of hotel revenue, and only consider the risk of falling below the expected revenue. The method proposed in this paper can be changed to a linear programming model by applying linearization techniques. Some examples are presented to illustrate the efficiency of this method.

Suggested Citation

  • Shuqin Liu & Kin Keung Lai & Jichang Dong & Shou-Yang Wang, 2006. "A Stochastic Approach To Hotel Revenue Management Considering Multiple-Day Stays," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 5(03), pages 545-556.
    • Handle: RePEc:wsi:ijitdm:v:05:y:2006:i:03:n:s021962200600212x
    DOI: 10.1142/S021962200600212X
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    Citations

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    Cited by:

    1. Martin Petricek & Stepan Chalupa & David Melas, 2021. "Model of Price Optimization as a Part of Hotel Revenue Management—Stochastic Approach," Mathematics, MDPI, vol. 9(13), pages 1-16, July.
    2. E. Martinez-De-Pison & J. Fernandez-Ceniceros & A. V. Pernia-Espinoza & F. J. Martinez-De-Pison & Andres Sanz-Garcia, 2016. "Hotel Reservation Forecasting Using Flexible Soft Computing Techniques: A Case of Study in a Spanish Hotel," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 15(05), pages 1211-1234, September.

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