Economic systems are characterized by uncertainty in their dynamics. This i
ncreasing uncertainty is likely to promote bad decisions that can be costly
in financial terms. This makes forecasting of uncertain economic variables
an instrumental activity in any organization. This paper takes the hotel i
ndustry as a practical application of forecasting using the Holt-Winters me
thod, The problem is to forecast the uncertain demand for rooms at a hotel
for each arrival day. Forecasting is part of the hotel revenue management s
ystem, whose objective is to maximize revenue by making decisions regarding
when to make rooms available for customers and at what price. The forecast
approach discussed in this paper is based on quantitative models and does
not incorporate management expertise. Actual data from a hotel are used to
illustrate the forecasting mechanism. (C) 2001 Published by Elsevier Scienc
e Inc.