Abstract
The online market enables hotels to enhance their visibility and drive up their revenue. This study analysed both the average room price and price count (i.e. the sum of the number of prices that hotels offer) on Booking.com for a period of 300 days prior to check-in, with data classified by official hotel category. Hotels’ number of rooms, day of the week, room type, room capacity (i.e. maximum number of guests per room) and length of stay were also tracked. This research was based on a stratified sample of hotels gathered by using random sampling and proportional allocation, as well as defining the strata by hotel categories. The dataset included 1,353,751 records. The results reveal that channel management activities are an important area of hotels’ operations, which generate a considerable workload in terms of the time devoted to updating data and other related tasks. However, hotels’ participation in online channels does not always match their importance in the market as measured by their relative number of rooms. Most of the variables under study have a significant positive impact on prices, except for hotels’ number of rooms, which failed to follow any discernible pattern of influence.
Highlights
Implementing revenue management in the hotel industry requires managers to determine ‘the right price for the right product for the right customer’ (Smith, Leimkuhler & Darrow, 1992) ‘at the right moment’ (Cross, 1997; Kimes, 1989; Kimes, Chase, Choi, Lee & Ngonzi, 1998; Kimes & Singh, 2008) and through the right distribution channel
A resource or inventory unit and its related components and/or conditions can be offered to potential customers up to a year in advance (Cross, Higbie & Cross, 2009; Schütze, 2008) in order to generate bookings up to the time that the service is provided. When hotel companies such as Marriott International (Hormby, Morrison, Dave, Meyers & Tenca, 2010) and Carlson Rezidor (Pekgün, Menich, Acharya, Finch, Deschamps, Mallery & Sistine, 2013) publish or update their prices and room availability daily, these hotel groups could benefit from an analysis of the relationship between prices and booking pace
This study focused on hotels located in Seville, a city in southern Spain famous for its rich cultural heritage
Summary
Implementing revenue management in the hotel industry requires managers to determine ‘the right price for the right product for the right customer’ (Smith, Leimkuhler & Darrow, 1992) ‘at the right moment’ (Cross, 1997; Kimes, 1989; Kimes, Chase, Choi, Lee & Ngonzi, 1998; Kimes & Singh, 2008) and through the right distribution channel When correctly formulated, this decision mix generates the maximum possible revenue and, where possible, extracts the greatest profit from hotels’ perishable assets or available resources (Baker & Collier, 2003; Donaghy, McMahon & McDowell, 1995; Guadix, Onieva, Muñuzuri & Cortés, 2011). Managers have to learn more about the way that hotels’ resources and features evolve throughout the entire booking period preceding check-in dates
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