For a hotel, the best overbooking policy is the one that
A) Minimizes the expected costs associated with empty rooms and walking customers.
B) Maximizes perceived service quality.
C) Results in the fewest customers being bumped.
D) Minimizes costs of no-shows

Question

Quizplus · Accepted Answer

The best overbooking policy for a hotel is one that minimizes the expected costs associated with both empty rooms (due to no-shows) and walking customers (those who are turned away because of overbooking). This approach balances the risk and cost of having unoccupied rooms against the cost and customer service implications of having to deny service to customers with reservations.

For a Hotel, the Best Overbooking Policy Is the One