On the Stackelberg game model of the collaboration of a hotel and third-party booking websites

This study aims to apply the bi-level game theory model to explore how a hotel collaborates with third-party websites to determine the optimal room rate and the number of overbooking to maximize the hotel’s total profit. The results show that the proposed bi-level game model not only can provide optimal room rate and the number of overbooking to the hotel but also the marketing efforts to third-party websites. The optimal room rate is significantly affected by the arrival rate and the hotel's marketing efforts; however, the compensation rate does not influence room rate and the number of overbooking.