Developing Acceptance Policies for a Stochastic Single-Resource Revenue Management Problem

The main objective of this study is to maximize expected revenues of a convention hall through dynamic booking management. By dynamically accepting booking requests, the proposed method can improve facility utilization and expected revenue. This research assumes random arrival of booking requests, and each booking request requires a different time span. Since event setup costs are high, any booking requests require consecutive time slots and cannot be interrupted. If any of the required time slots have been booked previously by other events, the booking request will not be accepted. Where demands may overlap, the conflict or potential conflict must be resolved in a way that maximizes revenue and convention hall utilization. Since booking requests arrive randomly, a dynamic booking management algorithm is proposed to maximize expected revenue and utilization. The computational experiments show this methodology improves revenue by more than 5%, by accepting booking requests dynamically.