Modeling Price Elasticity for Occupancy Prediction in Hotel Dynamic Pricing

Fanwei Zhu, Wendong Xiao, Yao Yu, Ziyi Wang, Zulong Chen, Quan Lu, Zemin Liu, Minghui Wu, Shenghua Ni

Abstract: In this paper, we propose a novel elastic demand function that captures the price elasticity of demand in hotel occupancy prediction. We develop a price elasticity prediction model (PEM) with a competitive representation module and a multi-sequence fusion model to learn the dynamic price elasticity from a complex set of affecting factors. Moreover, a multi-task framework consisting of room- and hotel-level occupancy prediction tasks is introduced to PEM to alleviate the data sparsity issue. Extensive experiments on real-world datasets show that PEM outperforms other state-of-the-art methods for both occupancy prediction and dynamic pricing. PEM model has been successfully deployed at Fliggy and shown good performance in online hotel booking services.