Title: A call for exploratory data analysis in revenue management forecasting: a case study of a small and independent hotel in The Netherlands
Authors: Dirk Sierag; Jean-Pierre Van Der Rest; Ger Koole; Rob Van Der Mei; Bert Zwart
Addresses: National Research Institute for Mathematics and Computer Science (CWI)/VU University Amsterdam, Science Park 123, 1098 XG, Amsterdam, The Netherlands ' Department of Business Studies, Institute of Tax Law and Economics, Leiden University, Steenschuur 25, 2311 ES, Leiden, The Netherlands ' Faculty of Exact Sciences, Department of Mathematics, VU University Amsterdam, De Boelelaan 1081a, 1081 HV Amsterdam, The Netherlands ' National Research Institute for Mathematics and Computer Science (CWI)/VU University Amsterdam, Science Park 123, 1098 XG, Amsterdam, The Netherlands ' National Research Institute for Mathematics and Computer Science (CWI)/Eindhoven University of Technology, Science Park 123, 1098 XG, Amsterdam, The Netherlands
Abstract: Using five years of data collected from a small and independent hotel this case study explores RMS data as a means to seek new insights into occupancy forecasting. The study provides empirical evidence on the random nature of group cancellations, an important but neglected aspect in hotel revenue management modelling. The empirical study also shows that in a local market context demand differs significantly per point of time during the day, in addition to seasonal monthly and weekly demand patterns. Moreover, the study presents evidence on the nonhomogeneous Poisson nature of the probability distribution that demand follows, a crucial characteristic for forecasting modelling that is generally assumed but not reported in the hotel forecasting literature. This implies that demand is more uncertain for smaller than for larger hotels. The paper concludes by drawing attention to the critical and often overlooked role of exploratory data analysis in hotel revenue management forecasting.
Keywords: hotel; revenue management; forecasting; data analysis; SME; small and medium enterprises; independent; small.
International Journal of Revenue Management, 2017 Vol.10 No.1, pp.28 - 51
Available online: 14 May 2017 *Full-text access for editors Access for subscribers Free access Comment on this article