A STOCHASTIC APPROACH TO HOTEL REVENUE MANAGEMENT CONSIDERING MULTIPLE-DAY STAYS

Shuqin Liu, Kin Keung Lai (), Jichang Dong and Shou-Yang Wang
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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;
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;

International Journal of Information Technology & Decision Making (IJITDM), 2006, vol. 05, issue 03, 545-556

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.

Keywords: Revenue management; stochastic programming; semi-absolute deviation (search for similar items in EconPapers)
Date: 2006
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1142/S021962200600212X

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