Abstract
This study presents a multi-stage synthetic model designed to aid hotel room pricing. The complicated factors used in this model include fixed and variable costs, profit goal, identification of market competition, factors needed to measure a differentiation price premium, price standard limits, and factors needed to develop discriminatory pricing for different segments of customers. The model framework can provide realistic perspectives of hotel room rates. A five-star international hotel was used to illustrate the application of this model by deriving actual price data. A critical step in this model was to develop the hotel's market premium price (MPP) based on consumer surveys. Factor analysis, ANOVA, and the Scheffé post-hoc tests were utilized in the analysis. The model provides new insights into hotel room pricing by offering a step-by-step process leading to room-pricing decisions for hotel revenue managers and marketers.
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