Abstract
The collaboration on hotel room booking service between hotels and third-party websites provides hotels much benefit on increasing capacity utilization. But the commonly used “first-come first-serve” (FCFS) form put hotels in a disadvantageous position especially when the websites have much more market attractiveness than the hotels. This paper proposes a new form named “setting Online-Exclusive-Rooms (OERs)” for a hotel to collaborate with a third-party website on room booking service. The form is presented by solving a two-stage decision problem: in the first stage, the hotel determines the quantity of OERs which can only be booked online through the third-party website; in the second stage, the hotel sets an acceptance policy to treat the additional request from the website. Analytical results indicate that “setting OERs” can improve the expected revenue of hotels compared with the current widely used “FCFS” form.
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