An Integer-Valued Time Series Model for Hotels that Accounts for Constrained Capacity

Many service industry firms strive hard to fill free capacity in order to cover their costs for a fixed capital stock. This paper presents a time series model where the capacity constraint is an integral part. The integer-valued autoregressive model builds on a simple idea of how daily time series a...

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Bibliographic Details
Published in:Studies in nonlinear dynamics and econometrics 2004-12, Vol.8 (4), p.1
Main Authors: Brannas, Kurt, Nordstrom, Jonas
Format: Article
Language:English
Subjects:
Economic models
Hotels & motels
Integer programming
Occupancy rates
Studies
Time series
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Summary:Many service industry firms strive hard to fill free capacity in order to cover their costs for a fixed capital stock. This paper presents a time series model where the capacity constraint is an integral part. The integer-valued autoregressive model builds on a simple idea of how daily time series arise for hotels and other similar establishments. Measures that follow naturally from the time series model are the occupancy probability and the duration of stay for the visitor. Empirically, we study the effects of price changes and a large festival, on these measures. [PUBLICATION ABSTRACT]
ISSN:1081-1826
1558-3708