Question

Assume we have some data regarding hotel booking of a hotel. How would you model the uncertainty with regard to no-shows for the hotel if the season is a rainy season?

Answer 1

First we need to put the data set in order

then we will check for seasonality in our data

From the ordered data, we will start checking the correlations for no-shows in our overall data

Then we will look at correlation of no shows only during the rainy season

If the correlation is higher during the rainy season, that is a good signal

We will now start looking at the growth rates of no shows ever year, % of no shows vs total bookings during the rainy season

Based on the historical growths, we will now start backtesting the data and check for errors

If the error rate is low, we can confidently start forecasting into the future

And that is how you can statistically model the problem