TITLE:
A Decision Problem of Hotels on Setting Online-Exclusive-Rooms in E-Commerce Age
AUTHORS:
Liang Xu, Xiaoyan Xu
KEYWORDS:
Revenue Management, Hotel Room Management, Online Platform, Optimization
JOURNAL NAME:
Journal of Service Science and Management,
Vol.7 No.4,
August
27,
2014
ABSTRACT:
Due to
the rapid development of information technology, customers’ consumption pattern
in hotel industry has dramatically changed, and many people book rooms through
some professional online platforms. Hotel managers need to redesign their sale
channel structures by incorporating online platforms, in order to increase
profit. This paper focuses on a revenue maximization problem for a hotel which
cooperates with an online platform. Two cooperating forms are investigated and
compared. Specifically, one intuitive form is named complete sharing, in which all the hotel rooms are shared with the
online platform for booking. The other form is named setting online-exclusive-rooms (OERs), in which the hotel set a
fixed quantity of rooms for exclusively booking from the online platform. By
building a loss queueing model, this paper finds some properties of the optimal
quantity of OERs in the latter form. Factors affecting the selection and how
they affect the selection are also investigated.