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Developing an Integrated Dynamic Revenue Management and Customer Relationship Management Model in Hotel Environment

VaezTehrani, Amir Hossein | 2013

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 45272 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Modarres, Mohammad
  7. Abstract:
  8. Revenue Management and Customer Relationship management are among the strategies that organizations use to increase their profitability. However, in the literature integrating these two strategies, have received little attention, especially in the case of Hotel. In this study, we develop a dynamic revenue management model to jointly make the capacity allocation and overbooking decision over a hotel network, in which customer relationship management strategies are also considered. Hotel customers are divided in two major groups of occasional and loyal customers. Price discounts and room availability is guaranteed for loyal customers, who are the hotel most profitable customers. A stochastic dynamic programming is developed for hotel capacity allocation, that overbooking costs are computed in its boundary condition. This dynamic programming problem is intractable, because of multidimensional nature of state variable. Therefore, some approximation algorithms are used to decompose dynamic programming formulation by check-in dates. In this approach we concentrate on the products which their check-in dates are in special day. Then we use a state aggregation approach to reduce each days state variable into one dimension. In order to evaluate the efficiency of the decomposition approach, we apply it for solving some test problems. Then computational results are compared with two efficient benchmark strategies used in the literature. The results indicate that this approach perform significantly better than the other benchmark strategies
  9. Keywords:
  10. Customer Relationship Management ; Capacity Allocation ; Hotel Network Revenue Management ; Overbooking ; Capacity Availability Guarantee ; Dynamic Programming Decomposition

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