Demand forecasting and optimizing room allocation at Icelandair Hotels

Choosing the right customer mix is an important revenue management problem that hotels face every day. During a period of high demand like the Icelandic tourist industry is experiencing now, hotels are in the position of being able to select the most profitable customers to stay at the hotel instead of welcoming every sale. A consequence of this high demand are frequent sell-outs of hotel rooms. Those sell-outs cause lost revenue opportunities when customers seek hotel rooms shortly before day of arrival often at a high price. Finding the right number of rooms to sell to each market segment to minimize these sellouts is important to maximize revenue. The demand unconstraining method proposed in this project is an example of a method which can be beneficial in the search to maximize revenues. This study compares different unconstraining and forecasting methods and implements the Booking Profile method, which is considered the most applicable and accurate unconstraining and forecasting method. A linear optimization model is developed with inputs from the unconstraining method to optimize booking limits and maximize revenues. A two-step solution method was implemented, incorporating the booking profile method and booking limit optimization for the revenue management team at Icelandair Hotels Group to use for their constant search to improve revenues. Keyword: Revenue management, Demand unconstraining, Linear optimization.

Author dc:creator

• Helgi Þór Guðjónsson 1987-

Contributors dc:contributor

• Háskólinn í Reykjavík

• Rekstrarverkfræði
• Meistaraprófsritgerðir
• Tekjustýring
• Ferðaþjónusta
• Línuleg bestun
• Tækni- og verkfræðideild
• Engineering management
• Revenue management
• Tourism
• Linear optimization
• School of Science and Engineering

Language dc:language.iso

en

Handle dc:identifier.uri

http://hdl.handle.net/1946/28751

OAI identifier oai:identifier

oai:skemman.is:1946/28751