THE BENEFITS OF OPTIMIZING PRICES TO MANAGE DEMAND IN HOTEL REVENUE MANAGEMENT SYSTEMS
Production and Operations ManagementPublished 1 December 2003
TIMOTHY K. BAKER, David Collier
Citations51
SJR quartileQ1
SJR score3.36
SNIP1.91
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Abstract
We investigate the revenue impact of a new Price Setting Method (PSM) and compare it with the industry standard Bid Price Method (BPM). This comparison is performed via a simulation that was validated by a major hotel chain. In 27 out of the 32 cases, the PSM outperformed the BPM based on statistically significant tests. The PSM produces an average revenue increase of 34%, which can be thought of as an upper bound on the realistic revenue increase.
Keywords
Decision SciencesBusiness, Management and Accounting
Manufacturing Planning and Control Systems
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