{"id":1253,"date":"2010-11-07T08:55:28","date_gmt":"2010-11-07T12:55:28","guid":{"rendered":"http:\/\/mat.tepper.cmu.edu\/blog\/?p=1253"},"modified":"2010-11-07T08:55:28","modified_gmt":"2010-11-07T12:55:28","slug":"informs-blog-entry-on-overbooking-revenue-management-and-data-mining","status":"publish","type":"post","link":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/2010\/11\/07\/informs-blog-entry-on-overbooking-revenue-management-and-data-mining\/","title":{"rendered":"INFORMS Blog entry on “Overbooking, Revenue Management, and Data Mining”"},"content":{"rendered":"

I have an entry over on the INFORMS blog<\/a> regarding overbooking of hotels.\u00a0 Here it is, though I recommend following the INFORMS blog for the next few days:<\/p>\n

Fellow blogger Guillaume Roels wrote that the hotel he reserved overbooked<\/a>, so he has been exiled to a remote location and he bemoaned the lack of customer service in this transaction.\u00a0 Something similar was obviously going on in my hotel, the Hilton (the main hotel for the conference).\u00a0 Throughout the checkin yesterday, the desk clerks were looking for volunteers to be exiled, offering various incentives (\u201dFree transportation! A drink vouncher! Big, big discounts, just for you!\u201d) for people to move.\u00a0 They weren\u2019t getting any takers while I was there, so I fear the late check-ins were similarly sent off to the boondocks.<\/p>\n

I bet the hotels got into a mess because they misestimated the number of people who showed up (or overestimated the \u201cmelt\u201d: people who canceled in the final week or two).\u00a0 If they simply took an average \u201cno show\u201d or \u201ccancel in the last week\u201d rate, I bet conference participants do so at a much lower rate.\u00a0 After all, the vast majority of us have preregistered for the conference, so late cancellation means forfeiting some or all of the conference registration fee.\u00a0 We have great incentives to figure out early whether we are going to be here or not.\u00a0 And, perhaps people in OR or other analytic fields tend to not cancel or cancel earlier due to the organized, steel-trap-like minds we all have!\u00a0 We know what we are doing, so we don\u2019t cancel in the last week.<\/p>\n

Of course, whether or not that is true is an empirical question, and one that can be best answered by data mining methods.\u00a0 Over the course of drinks last night, a senior researcher for a large business analytics firm pointed out the disconnect we have in our field between data mining and optimization.\u00a0 Often (though not always), these are seem as two phases of the \u201coperations research process\u201d.\u00a0 Instead, there is a need for much better integration between these approaches.\u00a0 Data mining should be constantly in use predicting cancellations and melt, driving the revenue management optimization approaches.<\/p>\n

For those who were bumped by the hotels last night, you have my sympathies.\u00a0 Perhaps during your rides into the conference, you can plan how to integrate data mining and revenue management better in order to let hotels avoid these issues in the future.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

I have an entry over on the INFORMS blog regarding overbooking of hotels.\u00a0 Here it is, though I recommend following the INFORMS blog for the next few days: Fellow blogger Guillaume Roels wrote that the hotel he reserved overbooked, so he has been exiled to a remote location and he bemoaned the lack of customer … Continue reading “INFORMS Blog entry on “Overbooking, Revenue Management, and Data Mining””<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,28],"tags":[],"class_list":["post-1253","post","type-post","status-publish","format-standard","hentry","category-conferences","category-informs"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1253","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/comments?post=1253"}],"version-history":[{"count":0,"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/posts\/1253\/revisions"}],"wp:attachment":[{"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/media?parent=1253"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/categories?post=1253"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mat.tepper.cmu.edu\/blog\/index.php\/wp-json\/wp\/v2\/tags?post=1253"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}