Study on hotel revenue management without explicitly incorporating competition

摘要

This paper analyzes the possibility of applying model that is not explicitly incorporate competition in hotel Revenue Management. Three scenarios are evaluated; (i) each seller understands how its own price affects its own demand but does not directly account for how its competitor's price does, (ii) each seller knows the total market size, and tries to learn how its own price affects demand, while failing to directly account for the effect of its competitor's prices, and (iii) the seller has no information regarding parameters of demand model. The demand is considered as stochastic. The result shows that the model that does not incorporate competition explicitly is only representative for the short-run market response. However, oligopoly model still gives better results.