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Dynamic overbooking limits for guaranteed and nonguaranteed hotel reservations
The two analysed situations determine the upper and lower overbooking limits
(see Figure 1.)
Figure 1 presents a population of points which are a linear combination of the number of
guaranteed G and nonguaranteed N reservations and have an expected used room capacity
of C. In algebraic form they are defined through equation (1). In differential form (1) is
presented as:
(9)
Extended model
Now we will extend the basic model discussed above with the inclusion of monetary costs
of overbookings. Let r be the room rate, m – the absolute amount of the cancellation charges
and v – the variable costs per occupied room per one overnight. The expected total room
revenues TR occ
unocc
exp will be the sum of the revenues from the occupied rooms TR exp and the
cancellation charges from the unoccupied rooms with guaranteed bookings TR exp :
(10)
Tourism Today - Fall 2007 - Full Paper
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