A Decision Problem of Hotels on Setting Online-Exclusive-Rooms in E-Commerce Age

Abstract

Due to the rapid development of information technology, customers’ consumption pattern in hotel industry has dramatically changed, and many people book rooms through some professional online platforms. Hotel managers need to redesign their sale channel structures by incorporating online platforms, in order to increase profit. This paper focuses on a revenue maximization problem for a hotel which cooperates with an online platform. Two cooperating forms are investigated and compared. Specifically, one intuitive form is named complete sharing , in which all the hotel rooms are shared with the online platform for booking. The other form is named setting online-exclusive-rooms (OERs), in which the hotel set a fixed quantity of rooms for exclusively booking from the online platform. By building a loss queueing model, this paper finds some properties of the optimal quantity of OERs in the latter form. Factors affecting the selection and how they affect the selection are also investigated.