MANAGING HOTEL RESERVATIONS WITH UNCERTAIN ARRIVALS

Based on our interactions with managers at two large hotels, we presen t a realistic model of the hotel reservation problem. Unlike tradition al models, ours does not assume thar all customers arrive simultaneous ly on the targeted booking date. We explain why this assumption may no t be appropriate for the hotel industry and develop a model of reserva tion booking which explicitly includes the room allocation decisions w hich are made on the targeted booking date. Based on observations of h ow the problem is solved in practice as well as the insights gained fr om this analysis, we develop simple heuristic procedures for accepting reservations. Computational results demonstrate that these heuristics perform well relative to an upper bound that is based on perfect info rmation about reservations requests and customer arrivals.