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Cancellation policies in the hotel, airline and restaurant industries

Journal of Revenue and Pricing Management volume 15, pages 270–275 (2016)Cite this article

Abstract

Littlewood’s Rule and Expected Marginal Seat Revenue (EMSR) maximize revenue through the allocation of various fares quoted for different levels of customers’ willingness to pay. Both assume no cancellations or no-shows, an unrealistic assumption. The airline industry, by contrast, has been consistently stringent about such policies. The purpose of this research is, therefore, to provide an overview of cancellation policies across airline, hotel and restaurant industries. Specifically, this study demonstrates the origin of cancellation policies, mathematics modeling of cancellation policies, how major changes have occurred and their consequent impacts that currently allow for cancellation sophistications in industries.

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Acknowledgements

The author wants to thank The Caesars Publishing Incentive Program for the support.

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Authors and Affiliations

  1. University of Nevada, Las Vegas, Las Vegas, USA

    ChihChien Chen

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  1. ChihChien Chen
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Correspondence to ChihChien Chen.

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1focuses on the consumer aspects of revenue management in this research, where she explores issues related to hotel customers’ willingness to pay in advanced booking setting, and the consequent impact on the performance of hotels’ revenue management policies. She presented her research at national and international conferences. She has won several research awards, scholarships and grants. She received her PhD from the University of Illinois at Urbana-Champaign in 2009.

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Cite this article

Chen, C. Cancellation policies in the hotel, airline and restaurant industries. J Revenue Pricing Manag 15, 270–275 (2016). https://doi.org/10.1057/rpm.2016.9

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  • DOI: https://doi.org/10.1057/rpm.2016.9

Keywords

  • cancellation policies
  • overbookings
  • no-show
  • airlines
  • hotels
  • restaurants

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