Stochastic Model for Hotel Revenue Management

This study presents several revenue optimisation models for hotel room reservations for a future target day with multiple-day stays. Assume that the hotel has only one type of room but the unit rate for the room may be different during every booking period and every reservation may cover several days. A stochastic programming model with semi-absolute deviations for measuring the risk for hotel revenue under an uncertain environment is proposed. And this stochastic model can be changed into a linear programming model by applying linearisation techniques. Numerical examples are presented to illustrate the efficiency of these models.