How does demand uncertainty affect food and beverage capacity in the hotel industry?

This study investigates the effect of demand uncertainty on hotels’ food and beverage (F&B) capacity using the operation data of international tourist hotels in Taiwan. The empirical results of this study show that demand uncertainty leads to an increase in F&B capacity. Moreover, the magnitude of this effect increasingly strengthens for hotels with larger F&B scales. Our results together with other studies on room capacity collectively indicate that hotels’ overcapacity problem resulting from demand uncertainty considerably varies with hotel scales and between different hotel sectors.     

A Linear Programming approach for robust network revenue management in the airline industry

The classical revenue management problem consists of allocating a fixed network capacity to different customer classes, so as to maximize revenue. This area has been widely applied in service industries that are characterized by a fixed perishable capacity, such as airlines, cruises, hotels, etc.It is traditionally assumed that demand is uncertain, but can be characterized as a stochastic process (See Talluri and van Ryzin (2005) for a review of the revenue management models). In practice, however, airlines have limited demand information and are unable to fully characterize demand stochastic processes. Robust optimization methods have been proposed to overcome this modeling challenge. Under robust optimization framework, demand is only assumed to lie within a polyhedral uncertainty set (Lan et al. (2008); Perakis and Roels (2010)).In this paper, we consider the multi-fare, network revenue management problem for the case demand information is limited (i.e. the only information available is lower/upper bounds on demand). Under this interval uncertainty, we characterize the robust optimal booking limit policy by use of minimax regret criterion. We present an LP (Linear Programming) solvable mathematical program for the maximum regret so our model is able to solve large-scale problems for practical use. A genetic algorithm is proposed to find the booking limit control to minimize the maximum regret. We provide computational experiments and compare our methods to existing ones. The results demonstrate the effectiveness of our robust approach.     

Reducing the ecological footprint of urban cars

This study develops the policy-making capabilities of the Ecological Footprint. The new capabilities we introduce in our Ecological Footprint model allow us to clarify policy options in the face of the increasing management complexity due to a more interconnected and uncertain world. We investigate the effectiveness of three illustrative policy options for reducing the Ecological Footprint of urban car transport: (1) improvements in efficiency/technology, (2) substitution with alternate fuel mixes, and (3) the reduction in demand by altering urban form. We investigate the success of policy options for a subnational case study jurisdiction in Australia, but in the uncertain global context. We use a resilience framework that considers critical social, economic, and environmental variables, multiple scales, and multiple possible futures. We find that delaying policy options to mitigate CO₂ emissions from the transport sector will increase the risks borne by society as a result of future global uncertainty, the uncertain timing of globally coordinated action on climate change and the timing of peak oil. We also find that the success of local policy is affected by the global future which prevails. The use of the Ecological Footprint allows policy to be informed by the consequences of both CO₂ emissions and increasing demand for land. The study provides a decision-making framework that allows local decision makers to make robust policy despite global uncertainty. This framework has wider applicability to other nations and/or subnational jurisdictions worldwide.     

The development of environmental initiatives in tourism: responses from the London hotel sector

In tourism, natural resources and the physical environment are regarded as important assets to enhance the product. Practitioners in this multisectoral industry (including hotels) perceive the environment and its resources to be a crucial feature in attracting more tourists. Today, most sectors of industry face pressure to improve their environmental performance. Hotels as a component of tourism are no exception. Hotels can act to reduce their environmental impacts and, collectively, make a substantial contribution to improving the quality of the environment. A wide range of publications offer guidance and advice on the actions hoteliers may take to alter their practices and thus address environmental issues. Yet, to date, it is not clear how many hotels are applying these recommendations, nor which actions share this common goal. Equally, the lack of operationalisation in environmental principles, implicit within many codes of practice, is seeing the emergence of a gap between theory and practice in these matters. It is the nature of this gap that is explored. Additionally, an assessment is undertaken of what the tourism industry is doing to improve environmental performance, and a case study is presented based on a detailed survey of environmental management practices in 42 London hotels. Copyright © 1999 John Wiley & Sons, Ltd.     

Different Shades of Green: Environmental Management in Hotels in Accra

This paper assesses the environmental management practices of different categories of hotels in Accra, Ghana. Managers of 200 hotels were surveyed, employing the stratified random sampling method. Results of the study indicate significant differences in the extent of environmental management of the hotels suggesting that the better the quality of a hotel, the better the environmental management performance. Suggestions are made towards improvement in waste management and voluntary environmental programmes in small and medium hotels that did not perform well in those areas of environmental management Copyright © 2013 John Wiley & Sons, Ltd.     

Reliable evacuation planning via demand inflation and supply deflation

This paper presents an evacuation route planning model that both accounts for demand uncertainty (i.e. the number of evacuees) as well as capacity uncertainty (i.e. the road capacities). To ensure reliability, the model plans for more evacuees (i.e. demand inflation) and less road capacity (i.e. supply deflation). A major contribution is that we provide a framework to determine the amount of demand inflation/supply deflation necessary to ensure a user-specified reliability level. The model is shown to be a natural generalization of previously proposed evacuation models. A small numerical case study reveals the key characteristics of the model.     

Evaluating spatial accessibility to healthcare services under travel time uncertainty: A reliability-based floating catchment area approach

Most existing healthcare accessibility studies ignore the travel time uncertainty that are commonly encountered in road networks. This study aims to examine the impacts of travel time uncertainty on healthcare accessibility. A reliability-based two-step floating catchment area (2SFCA) method is proposed to evaluate healthcare accessibility under travel time uncertainty. The proposed measure generalizes the conventional 2SFCA measure by explicitly considering individuals' reliability constraints when scheduling visits to healthcare facilities in the face of travel time uncertainty. The proposed measure is further used to investigate travel time uncertainty impacts in a comprehensive case study. A big dataset of taxi trajectories is collected in the case study to extract dynamic information on travel time distributions. The results of the case study highlight the significant but heterogeneous impacts of travel time uncertainty on healthcare accessibility for various parts of the city at different times of the day. They also have several methodological implications for the evaluation of healthcare accessibility under travel time uncertainty.     

Price,capacity and concession period decisions of Pareto-efficient BOT contracts with demand uncertainty

In this paper, we study the impact of demand uncertainty on the build-operate-transfer (BOT) contract design by optimizing a bi-objective problem via three critical decisions: toll, capacity and concession period. We derive the optimums and identify the public and private sector’s economic incentives. We find that the optimal length of concession period and the service quality of the infrastructure depend on the two parties’ operational costs and negotiation powers. Under mild conditions, we prove that the government will build a larger capacity but charge less than the private sector. Furthermore, the efficiency of BOT contract is improved with demand uncertainty.     

Elite hotels: painting a self‐portrait

Commercial hospitality provision arose from a general process of modernisation, the gradual breakdown of the importance of kinship and social obligation relative to a common duty of care for those travelling away from home, and the process of urbanisation. Consequently market demand evolved for the provision of accommodation, food and beverage for those persons temporarily removed from their domestic environment. What is argued in this paper is that the original function of commercial hospitality bears scant resemblance to sophisticated potentialities for socio‐economic self‐expression, which manifest themselves in the form of the elite hotel sector. The manner in which contemporary consumption of elite hotels revolves around the notion of self, with multiple identities and group affiliations is explored. Conclusions focus on the elite hotel sector as a means of defining self‐identities and the management implications therein for the provision of commercial hospitality in elite hotels. Copyright © 2001 John Wiley & Sons, Ltd.     

Entrepreneurship in the small and medium-sized hotel sector

The purpose of this study is to gather information about the determinants and characteristics of the owners/managers of small- and medium-sized hotels (SMSHs) and identify various challenges in starting up and operating businesses in the United Arab Emirates (UAE). The paper also highlights key actions taken by the owners/managers of SMSHs to manage their business in the competitive business environment. To avoid any bias associated with a specific method, a multi-method research approach has been used for data collection. The results reveal that the majority of the owners/managers of SMSHs in the UAE are male, young and middle-aged with secondary- and higher-education levels, and relatively new to the tourism industry. With the characteristics of self-confidence, perseverance and independence, the motivations for the business ventures of the owners/managers include wanting to be financially independent, become one's own boss, involvement in family business and the opportunities of the hotel business. Among the key business challenges highlighted by the owners/managers of SMSHs are stiff competition in the hotel industry, increased operating costs, reduced demand and lack of skilled employees. Several key strategies have been employed to face these challenges. These include offering competitive pricing, improving the marketing and channels of promotion, enhancing the quality of service and providing superior customer service. At the same time, the owners/managers of SMSHs also felt that the government and policy-makers should play a more proactive role in promoting the tourism sector. This research provides a useful insight into the activities in the hotel tourism business sector and the challenges they encounter while operating in the UAE economy.     

Diversification strategy with random yield suppliers for a mean–variance risk-sensitive manufacturer

We consider the diversification strategy for a mean–variance risk-sensitive manufacturer with unreliable suppliers. We first analyze the linear model and find that the suppliers are selected according to the descending order of their contributed marginal expected profit, and increasing the manufacturer’s risk-averseness leads to a more even allocation of demand across the suppliers. Then, we study the general newsvendor model. By approximating the leftover inventory with a normal distribution, we establish the general properties of the active supplier set and show that the supplier selection rule is similar to that under the risk-neutral setting when the demand uncertainty is large. Moreover, we conjecture that the selection rule also applies when the demand uncertainty is low, which we verify with an extensive numerical study. Our paper makes two contributions: First, we establish the properties of the optimal diversification strategy and develop corresponding insights into the trade off between cost and reliability under the mean–variance framework. Second, we perform comparative statics on the optimal solution, with a particular emphasis on investigating how changes in the supplier’s cost or reliability affect the risk-averse manufacturer’s ordering decisions and customer service level.     

Coordination with a backup supplier through buy-back contract under supply disruption

This paper studies a buy-back contract between a buyer and a backup supplier when the buyer’s main supplier experiences disruptions. The expected profit functions and the optimal decisions of the contract players are derived through a sequential optimization process. The common properties of the contract as well as the differences under the demand uncertainty and the main supplier’s recurrent supply uncertainty are explored through comparative studies and numerical examples. The study contributes to the literature by providing a better understanding of the impacts of demand and supply uncertainties and by shedding insights on the value of a backup supply.     

An environment-adjusted dynamic efficiency analysis of international tourist hotels in Taiwan

The paper is the first study to combine four-stage approach and dynamic data envelopment analysis (DEA) to investigate the efficiencies of 45 international tourist hotels in Taiwan during 2002–2011. Using the four-stage approach of Fried et al. [1999. Incorporating the operating environment into a nonparametric measure of technical efficiency. Journal of Productivity Analysis, 12(3), 249–267] and the dynamic DEA model by Tone and Tsutsui [2010. Dynamic DEA: A slacks-based measure approach. Omega, 38(3), 145–156], the study considers the effects of the external operating environments and carry-over activities between two consecutive terms, and calculates managerial efficiency of international tourism hotels in Taiwan. The empirical results show that dynamic DEA provides more stable pure managerial efficiencies than traditional DEA, reflecting the continuity of the links between terms. Then the study employs Tobit regression to estimate the effects of location, management style, and occupancy rate on input slacks. The location in resort area leads to less slacks of employee and room. The chain system helps reduce slacks in room and area of meal department. The slack of employee and room gets lower while occupancy rate gets higher. After controlling the three external environment variables, the efficiency scores of 28 hotels increase, 9 hotels fall, and other 8 hotels still sustain on the efficient frontier.     

Environmental determinants of VMI adoption: An exploratory analysis

This study empirically examines the determinants of adoption of Vendor Managed Inventory programs that have recently gained popularity in many industries. To achieve this goal, survey scales are adapted and developed for buyer and supplier market competitiveness, product demand, buyer operational uncertainty, and buyer–supplier cooperation. Based on the analysis of responses from purchasing managers in three industries, structural equation modeling results suggest that the competitiveness of the supplier’s market and buyer–supplier cooperation are positively associated with VMI adoption, while operational uncertainty for the buyer is negatively associated with VMI adoption. Managerial implications and limitations of the study are also noted.     

The impacts of perceived organizational prestige and organization identification on turnover intention: the mediating effect of psychological empowerment

This study examined the attitudes of workers employed at hotels in Turkey. An integrated model was developed to highlight the relationship between organizational prestige and organizational identification with turnover intention as mediated through psychological empowerment. Using a sample of 332 employees, structural equation modelling was conducted to establish this relationship by analysing the responses of employees of hotels in Turkey. The findings of the study reveal a strong relationship between organizational identification/organizational prestige and hotel employees’ turnover intention. The study discusses the implications of the presented findings and suggests potential practical applications.     

Impact of all-inclusive packages on hotel efficiency

In the last decade, all-inclusive packages have had an extraordinary boom in one of the most popular sun and beach tourism destinations in Europe, the Canary Islands. This fact reinvigorated the debate on potential benefits and negative effects on the local economy. However, there is no empirical evidence of the impact that all-inclusive packages may have on the efficiency in the hotel industry. This study assessed the effects of all-inclusive packages on cost and profit efficiency using the stochastic frontier approach and the model proposed by Battese and Coelli [(1995). A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20(2), 325–332] in a sample composed of 102 hotels of the Canary Islands from 2008 to 2014. The empirical results revealed that the hotels that offered all-inclusive packages exhibited lower efficiency levels than those hotels that did not provide this service. These results have important implications for both public policies and hotel management.     

Monitoring hotel performance using occupancy time‐series analysis: the concept of occupancy performance space

Time series factor analysis is used to identify four temporal dimensions of occupancy performance in 279 English hotels over the period January 1992 to December 1994. These dimensions referred to as reference curves differentiate hotels on the basis of overall occupancy level (RC1), seasonality (RC2), long‐term trend (RC3) and length of season (RC4). The reference curves are used to define the dimensions of occupancy performance space in which the 279 hotels are positioned, with the hotels differentiated by hotel situation type. It is shown that the positioning of a hotel in occupancy performance space can provide a precise and effective basis for hotel marketing.     

The impacts of Radio Frequency Identification (RFID) technology on supply chain costs

Radio Frequency Identification (RFID) is regarded as a promising technology for the optimization of supply chain processes since it improves manufacturing and retail operations from forecasting demand to planning, managing inventory, and distribution. This study uses a simulation model to calculate the expected benefits of an integrated RFID system on a three-echelon supply chain obtained through performance increases in efficiency, accuracy, visibility, and security level. The study investigates how the product value, lead time, and demand uncertainty affect the performance of the integrated RFID supply chain in terms of cost factors at the echelon level.     

The performance of the Slovenian hotel industry: evaluation post‐privatisation

This study analyses the technical efficiency of Slovenian hotels using the data envelopment analysis method. Multiple inputs and outputs are included in the analysis, ranging over the period 2005–2007. The results reveal an increase in efficiency over the period analysed. The results also confirm that factors such as the hotel's year in business, star rating and size are positively related to efficiency variations between hotels. Copyright © 2010 John Wiley & Sons, Ltd.     

Transportation uncertainty and international trade

This paper uses a numerical framework to demonstrate that uncertainty in the arrival time of foreign goods can substantially reduce the demand for foreign goods. It further reveals that the impacts of falling transport costs and shipment time on international trade growth could be discounted, if uncertainty arises in the arrival time of the imported goods. This in turn suggests that reduced uncertainty, which is possibly the results of transportation improvements, might have contributed to the growth experienced in world trade growth over the past several decades. Thus, neglecting the roles of improvements in international transportation arrangements and reduced uncertainty will lead to underestimating the contribution of transportation improvements to trade growth.