Journal of the Faculty of Tourism and Hotels-University of Sadat City Vol. 1, Issue 2/1, December, 2017 -12- Domestic Guests' Perception of Hotel Capacity Management Practices *Abuelkassem A. A. Mohammad *Lecturer at Hotel Management Department, Faculty of Tourism and Hotels, Minia University, Minia, Egypt Abstract In their pursuit of achieving optimal revenues of room capacity, hotels adopt several capacity management practices that can negatively impact guest satisfaction and long-term loyalty. This study aimed to investigate the viewpoint of Egyptian domestic tourists about the practices of room capacity management undertaken by hotels in Egypt. The study focused on four major sets of practices with a total of 18 practices to be examined. A quantitative approach was adopted in this study using questionnaire survey as an instrument for collecting primary data. The sample of this study included 339 participants who were selected using snowball sampling technique to participate in the survey study of this research. The results revealed that all the 18 examined capacity management practices were found to be moderately unacceptable by participants with some significant association between the acceptance of these practices and participants' demographic characteristics and accommodation patterns. The results also showed that the investigated practices were perceived by participants to have a significant negative impact on their both overall satisfaction with hotels and loyalty. The study has also provided some practical recommendations to help hotel managers to avert the negative impacts of these practices on domestic guests' satisfaction and loyalty. Keywords: capacity management, guest perception, satisfaction, loyalty. 1. Introduction Capacity management refers to the ability and skill of an organization to balance between supply and demand through influencing demand or providing suitable capacity that meets demand. In other words, it is the process of matching customer demand for certain services and the ability of a service provider to satisfy this demand (Armistead & Clark, 1993; Edgar, 1997). Edgar (1997) further explained that hotel capacity management is a strategy used for maximizing revenues of the hotel main services. Pullman and Rodgers (2010) differentiated between demand management and capacity management. Demand management concerns with directing the time and volume of demand for a service, while capacity management concerns with providing adequate capacity that satisfies demand. Nevertheless, capacity management is used as an overarching concept that involves managing both demand and capacity (Pullman & Rodgers, 2010). In this context, a wide range of practices can be adopted by hotels to manage room capacity, such as: demand forecasting; market segmentation; pricing; inventory control policies; managing distribution channels; overbooking and cancellation policies (Tse, & Poon, 2011).