Most consumers don't like having their travel plans altered, but two UC Davis professors say canceling the reservations of more customers could help airlines and hotels make more money. Assistant Professor Eyal Biyalogorsky and Professor Eitan Gerstner of the campus's Graduate School of Management are recommending that airlines and hotels sell more of their seats and rooms earlier. And, as they receive reservations from last-minute customers willing to pay a higher price, that they then cancel the lower-priced reservations with appropriate compensation. Biyalogorsky and Gerstner research how firms should manage price and capacity when demand is uncertain. With two others, they recently published "Overselling with Opportunistic Cancellations" in the journal Marketing Science. In industries where the value of a product or service is closely related to time, sellers typically hedge against the risk of "spoilage" by selling some units early at low prices; they hedge against the loss of sales at higher prices by blocking off units in the hope of selling them later at higher prices. The professors say airlines could increase ticket revenues by blocking off fewer seats, selling more early and, in essence, buying back the lower-priced reservations when customers willing to pay more come along. Compensation to people giving up their seats -- usually volunteers -- would be less than the difference between the two ticket prices. Biyalogorsky suspects the reason for the gate-side practice of asking for volunteers may be quietly shifting from overbooking based on an inaccurate estimation of no-shows to the airlines' desire to increase ticket revenues for each flight. He says the hotel industry also could benefit by adopting the model. For example a tourist reserves a hotel room early for $75 a night with the knowledge the hotel could cancel his reservation. When he arrives, the front desk clerk redirects him to another hotel, which has a room waiting at the same price, and he is given $75 in compensation. The original hotel rents the freed room to a business traveler willing to pay $200. Biyalogorsky says such practices create a "win-win-win" situation: the tourist has a room and pockets $75, the business traveler is accommodated and the hotel makes an extra $50. The professors say the model could be applied to other industries such as the rental-car business, advertising sales and even home sales.