Abstract
This research studies the customer behavior in an online hotel reservation in which a hotel differentiates the same room service with different sale conditions: (i) Restriction Condition, (ii) Mild Condition, (iii) Last Minute Condition. Customers face uncertainty about their plan, and they are charged with cancellation fee. Customer utility is developed and demand function is derived. Then, the optimal prices for different conditions are determined to maximize hotel's profit, and achieve customer saving. From numerical experiment, offering three sale conditions, hotel could increase profit 7.6 % compared with offering the restriction and last minute conditions, and 6.6% compared with offering the mild and last minute conditions. Three sale conditions could generate an average customer value of 40.26% compared with offering the mild and last minute conditions. In addition, customer saving when cancel the reservation of 34.49% could be reached when compared with the restriction and last minute conditions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.