Booking models for multiple-day stay hotel room revenue management

This study presents a stochastic optimization model for hotel room reservations on a future given day with multiple-day stays under an uncertain environment. We consider hotel rooms to have only one resource, but the unit rate for the hotel room is different during every booking period, and every reservation period may cover several days. A semi-absolute deviation model is used to measure the risk for hotel revenue, and only the risk of revenue falling below the expected amount is considered. The decision maker may choose different risk trade-off factor according to. his (or her) aversion to risk. The stochastic method proposed in this study can be changed into a linear programming model by applying linearlization techniques. A multiple-scenario example is presented to illustrate the efficiency of this method.