Optimizing Hotel Room Occupancy Prediction Using an Enhanced Linear Regression Algorithms

Predicting the correct hotel occupancy rate is important in the tourism industry because it has a major impact on the level of revenue and maintenance of a hotel’s reputation. With accurate predictions, hotel performance can be optimized regarding resources, staff, and hotel facilities. The linear regression method has been proven to perform causal predictions well. However, this method has several weaknesses, such as the function of the relationship between dependent variables and independent variables that are not linear, overfitting, or underfitting in building the prediction model. The purpose of this study was to optimize the linear regression model in predicting hotel occupancy rates. The method used in this study was a Linear Regression method optimized with Polynomial Regression and regularization techniques to reduce overfitting using Ridge Regression and Lasso Regression. The results of the model evaluation showed that linear regression, which was optimized with Polynomial Regression and Ridge Regression in the model with the historical data of the Adiwana Unagi occupancy rate, historical data of the hotel occupancy rate in Bali, and the number of tourist visits in Bali, gave the best performance, with a mean absolute error score of 1.0648, root mean square error of 2.1036, and R-squared of 0.9953. The conclusion of this research was optimization using polynomial regression, achieving the best evaluation scores, where the prediction model performance indicates that variable X7 (tourist visit numbers) strongly influences the prediction of the occupancy rate.