THE OVERBOOKING PROBLEM IN HOTELS WITH MULTIPLE TOUR-OPERATORS

Examines the practice of overbooking at hotel and tour operator levels . By accepting more reservations than their available capacity, hotels hedge against the problem of cancellations. Hotels located in popular tourist resorts, allocate their capacity to multiple tour-operators w ho through the vacation packages they offer, fill the hotels' capacity . Shows that for this type of hotel, an overbooking policy applied at the hotel level and derived using the capacity of the hotel as a whole , gives better cost savings than when formulating an overbooking polic y for each tour-operator separately. The result of the analysis provid es significant managerial implications since a hotel dealing with mult iple tour-operators, in devising its overbooking policy needs only to consider the occupancy of the hotel as a whole and not the performance of each tour-operator. This simplicity is further reflected in the re duction of information required to be recorded.