 Customer perspective on overbooking: The failure of customers to enjoy their reserved services, accidental or intended?Xiaolong Guo, Yufeng Dong and Liuyi Ling Journal of Air Transport Management, 2016, vol. 53, issue C, 65-72 Abstract: Overbooking is widely applied in the service industry to hedge against undesirable situations, such as cancellations and no-shows. However, during the implementation of overbooking, service providers may turn down some customers when the number of arrivals exceeds their capacity on the target date. Therefore, this paper examines overbooking from the customers' perspective to offer them a clear perception on the possibility for their reservations to be denied by the service provider. By establishing a Stackelberg model between a service provider and an online travel agency, we explore how optimal overbooking strategy is developed by the service provider. Afterward, by analyzing the obtained optimal overbooking pad, we calculate the probabilities of denied service under different levels of monetary compensation that is paid to denied customers. A higher monetary compensation guarantees a higher chance of successful service. This paper also provides customers with some reference when booking services. Keywords: Compensation; Denied service; Overbooking; Reservation; Service provider (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jaitra:v:53:y:2016:i:c:p:65-72 DOI: 10.1016/j.jairtraman.2016.01.001 Access Statistics for this article Journal of Air Transport Management is currently edited by Anne Graham More articles in Journal of Air Transport Management from Elsevier |
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