Hotel Room Rates Research Articles

How does room rate and rate dispersion in U.S. hotels fluctuate?

This study aims to examine whether hotel room rates differ across booking windows between both direct and indirect channels and six types of hotel classes and to investigate the effect of booking windows and hotel classes on room rate dispersion. The data was gathered using a stratified sample to create a list of 705 hotels within the U.S. Repeated-measures ANOVA discloses a significant three-way interaction effect of booking windows × distributional channels × hotel classes on actual room rates. Furthermore, this study confirmed the interaction effects of booking windows and hotel classes on room rate dispersion. These observations have implications for revenue managers, and they show that 60 days prior to arrival had the largest dispersions for most hotel classes. When revenue managers develop pricing strategies, they should be conscious of these reported results and accordingly manage both their channels and room rates.

What caused the rise of Airbnb? An examination of key macroeconomic factors

The social and economic implications of the Airbnb phenomenon have been the subject of much research. Yet, the academic literature on Airbnb is nascent. Specifically, the issue of whether major macroeconomic conditions affect the supply of Airbnb has not been investigated. To address this gap, we propose a conceptual model that explains the determinants of Airbnb supply and examine the extent to which major macroeconomic factors affect the supply of Airbnb. Specifically, we analyze the effects of hotel room rates (ADR), hotel demand, tourism demand, house prices, gross domestic product (GDP), wages and unemployment on the supply of Airbnb in 50 U.S. states. Results show that increases in hotel ADR, house prices, and GDP have contributed to an increase in the supply of Airbnb, whereas increases in unemployment rates and wages have adverse effects on Airbnb supply. Theoretical and policy implications are discussed within realms of macroeconomic theory.

ASR News & Announcements

Preparations for this summer’s 82nd Annual Meeting are in full swing. The meeting will be held August 7–9, 2020 at the Hotel Nikko San Francisco, located in Union Square and around the corner from the ASA hotel. We will begin with a Welcoming Reception on the evening of Friday, August 7. Similar to last year, we are planning a joint Closing Reception with the ASA Religion Section for the evening of Sunday, August 9. The Presidential Address will be given by James C. Cavendish, and the Furfey Lecture will be delivered by Kelsey Burke. The ASA Sociology of Religion Section day is Monday, August 10. The hotel reservation link, meeting registration page, and information about San Francisco are available on Annual Meeting page of the ASR website, www.sociologyofreligion.com. If you have not yet made your hotel reservations, please do so immediately. ASR’s discounted room rate is good only through July 16. Please double check the nights that you want to stay in the hotel. The ASR understands that the hotel may be expensive. Unfortunately, costs in San Francisco are generally very high. The $279 room rate is a discounted rate, and the ASR got the best deal that we could. Rest assured that although San Francisco may be more expensive than other places, costs in Chicago (including the hotel room rate) will be much lower. Also, the ASR doubled the amount of money we are devoting to the Gallagher Travel Grants for our student members and international colleagues. Please know that you are contributing to the vibrancy of the ASR by staying at the ASR hotel:

Perhitungan tarif kamar hotel menggunakan activity based costing pada Hotel Sapadia Kotamobagu

This research was conducted with purpose to compare the determination of hotel room rates by determining the cost of production issued by the company, in determining existing hotel room rates. The hotel company, named the Hotel Sapadia Kotamobagu. In this study the determination of hotel room rates will use the Activity Based Costing (ABC) method as a comparison with the room rates determination method used by the Sapadia hotel company. ABC Method Improves the accuracy of calculating goods cost by determining how much the overhead cost remain different in comparison to change other than based on production volume. The cost driver is one of the ABC elements which explain the overhead cost.

Are we explaining the movement of hotel room rates correctly?

Demand function, inverse demand function or market equilibrium condition has been used to estimate the empirical models that explain the movement of hotel room rates. However, hotels generally face excess supply of rooms. This research paper develops a simple theoretical model to link hotel room rates to excess supply of hotel rooms. The annual data of Singapore from 1991 to 2017 is used to test this framework. Due to small sample size, with only 27 observations, the bounds testing approach to cointegration is applied on the annual data of hotel industry in Singapore because the obtained estimators are super-consistent. It is found that average hotel room rate and average hotel occupancy rate are cointegrated to confirm hotel room rates and excess supply of hotel rooms are inversely correlated. In order to avoid model mis-specification, major crises are captured by dummy variables which are treated as fixed regressors in the bounds testing approach to cointegration. The empirical and theoretical frameworks used in this study suggest that when hotel occupancy rate is used as an independent variable in modelling the determination of hotel room rates, a researcher is adopting excess supply framework developed in this paper. Furthermore, this framework teaches students in tourism a simplified way to explain the movement of hotel room rates, while still reminding students about the complexity of hotel industry.

An empirical analysis of Lisbon hotel room rates determinants

This study investigates the impact of several characteristics and attributes of hotels on room rates in one of the most visited cities in Europe. The research allows to compare, in a transparent way, findings of previous studies and promotes added value using for the first time the hedonic price model (HPM) in the hospitality industry in Lisbon, Portugal. Although hotel room price determinants have already been studied, in this study it was introduced physical variables and location variables all together, as well as it was added the variables relating to certain services offered. A significant impact on hotel prices by official stars and OTAs punctuation has been confirmed. In line with previous studies, an additional star and belonging to a chain allow the hotel to increase the price. In addition, other attributes, such as the distance of the hotel from the airport and the centre, have impact on hotel prices. The evidence that the existence of a spa and a pool influences hotel prices will support stakeholders in investment and management decision.

Customer satisfaction & engagement behaviors towards the room rate strategy of luxury hotels

Purpose – This study investigates the attributes that impact hotel users’ experiences, satisfaction levels, and engagement behaviors through dimensions of the room rate strategy in the context of luxury hotels in Vietnam tourism market. Design/methodology/approach – A questionnaire was prepared, drawing from the scales in literature. A PLS-SEM tool was used to measure and test research hypotheses from the data set of 319 completed surveys in the online and offline form. Findings – The results indicate that higher the service quality towards dynamic hotel room rates, higher are customer satisfaction and engagement behaviors (CEBs). The significant perception of hotel users is mostly caused by “price fairness,” and it in turns, influences customer satisfaction levels. In particular, customer satisfaction serves as a partial mediation on customers’ perception of the hotel room rate strategy when service quality and CEBs are perceived. Originality – Understanding the variables that predict room rate strategy proposes suggestions for practitioners and hospitality researchers. This study empirically examines the extent to which factors discussed may influence the hotel room rate strategy accordingly to heighten customers’ satisfaction and engagement behaviors.

A meta-regression on the effect of online ratings on hotel room rates

Purpose Online ratings (review valence) have been found to exert a strong influence on hotel room prices. This study aims to systematically synthesize research estimating the impact of online ratings on room rates using a meta-analytical method. Design/methodology/approach From major academic databases, a total of 163 estimates of the effects of online ratings on room rates were coded from 22 studies across different countries through a systematic review of relevant literature. All estimates were converted into elasticity-type effect sizes, and a hierarchical linear meta-regression was used to investigate factors explaining variations in the effect sizes. Findings The median elasticity of online ratings on hotel room rates was estimated to be 0.851. Meta-regression results highlighted four categories of factors moderating the size of this elasticity: data characteristics, research settings, variable measures and publication outlet. Among sub-ratings, results revealed value rating and room rating to exert the largest impact on room rates, whereas staff and cleanliness ratings demonstrated non-significant impacts. Practical implications This study provides practical implications on the relative importance of different types of online ratings for online reputation and revenue management. Originality/value This study represents the first research effort to understand factors moderating the effects of online ratings on hotel room rates based on a quantitative review of the literature. Moreover, this study provides beneficial insights into the specification of empirical hedonic pricing models and data-collection strategies, such as the selection of price variables and choices of model functional forms.

Last-minute hotel-booking and frequency of dynamic price adjustments of hotel rooms in a cosmopolitan tourism city

Although the Internet has contributed to lowering the cost of adjusting hotel room rates on Internet-enabled distribution channels and promoted last-minute hotel booking, research on the frequency of dynamic price adjustments of hotel rooms remains scarce. Using panel data techniques involving count data models, this study examined online pricing data of hotels in a cosmopolitan tourism city to identify supply-side factors and location attributes that can be used in conjunction with the established demand-based pricing strategy to explain the frequency of adjusting room rates. After controlling for spatial locations and demand, results indicated that the frequency of room rate change is also related to seller density, hotel size, star rating, and consumer heterogeneity reflected in different booking days. Practically, the findings have revealed subtle differences in the implementation of demand-based dynamic pricing that can be used by practitioners and consumers for strategic decision-making.

Does Willingness to Pay for Rate Conditions Depend on the Booking Window? A Novel Time-Dependent Conjoint Analysis Approach

This research note draws attention to a novel choice-based conjoint (CBC) model by which guests’ preferences toward hotel room rate conditions can be predicted as a function of time. Through the model, the notion is explored whether willingness to pay for rate conditions (without penalty) depends on the size of the booking window. The modified choice model includes time as an additional “attribute.” This attribute does not present a feature of the choice propositions, but instead is associated with the choice context. An empirical study was carried out to demonstrate the proposed model using three common booking conditions (i.e., free cancelation, free date change, pay on departure). The results show significant and positive time-dependent mean components for cancelation and date change conditions. Despite a limited sample size, all significant effects have expected directions (no parameter reversals) providing evidence of the robustness of the model. The results indicate that the ability to cancel or change a booking is preferred more when the booking window is bigger. Accordingly, as the time period between the advanced purchase and intended date of arrival increases, the willingness to pay for rate conditions also increases. This finding has major practical implications for price and revenue optimization. Limitations of the proposed time-dependent model are discussed.

ANALISIS ACTIVITY BASED COSTING SYSTEM DALAM PENENTUAN TARIF KAMAR PADA HOTEL GRAND BOUGENVILLE KOTA BENGKULU

The aim of this study is to determine activity-based costing system in the determination of room rates on Grand Bougenville Hotel of Bengkulu City. Data collection method in this study used is documentation and interview. The method of analysis used is descriptive quantitative, trying to get accurate data in the form of numbers then the data is calculated to get the amount of hotel room rate. There is a difference between room cost which is determined by the management of Grand Bougenville Hotel of Bengkulu City and by applying activity based costing system. The calculation result of room cost by using activity-based costing system, namely for standard rooms of Rp 172.249,- superior of Rp 182.201,- and suite of Rp 331.182,-. Meanwhile, room cost based on the calculations performed by Grand Bougenville Hotel of Bengkulu City known that for the standard room type of Rp 35.599,- superior Rp 31.297 and suite of Rp 57.881. The calculation of the selling price is also different between hotel calculations with the addition of mark up by 25% then the sale price of standard is Rp 240.073 superior is Rp 297.437 and suite is Rp 461.585. There is a lower price difference between the implementation of hotel management price and calculation result by using activity based costing system that is, standard Rp 240.073 superior Rp297.437 and suite Rp 461.585.

SPORTS‐LED TOURISM, SPATIAL DISPLACEMENT, AND HOTEL DEMAND

We analyze the relationship between professional sports events and concerts held in LA's Staples Center and nearby hotel performance. Government‐led economic redevelopment projects often envision sports facilities as tourist magnets. Little evidence exists supporting links between sporting events and hotel demand. An empirical analysis exploiting exogenous daily variation in the timing of games and concerts from 2002 to 2017 shows a small positive impact on room revenue at hotels within one mile and larger room revenue decrease at hotels located one to 4 miles away. The overall impact on hotel room revenue and rooms rented was not positive. Nearby hotel room rates increased during NBA and NHL work stoppages. The city granted four new hotels built very near the arena exemptions from occupancy taxes for 20–25 years; these exemptions reduced hotel tax revenues by a minimum of $4.5 million annually and may not have been needed to spur new hotel development. (JEL H26, H71, Z28)

The effect of the Las Vegas Strip on hotel prices: A hedonic approach

The authors investigate the effect of location on the nightly hotel room rates charged in Las Vegas. Using a hedonic estimation approach, the authors control for room amenities and hotel and time characteristics. Including 6087 hotel room nights for hotels located near the Las Vegas Strip in two different years (2012 and 2017), the authors estimate the relationship between hotel location and nightly room rates. Consistent with prior investigations, the authors find strong evidence for the effect of location, amenities, and day of week on hotel prices, with a “Strip premium” of 40.21% (US$106.85 at the mean hotel price) for hotels located within 0.25 miles of the Las Vegas Strip compared to hotels beyond 0.75 miles of the Strip. They estimate a Center-of-Strip premium of 70.23% (US$186.61 at the mean hotel price) for hotels located within 0.75 miles, 36.89% (US$98.01) for the next 0.75 miles, and 18.89% (US$50.18) for the next 0.75 miles, compared to hotels beyond 2.25 miles.

호텔의 온라인 예약 시스템 정보가 객실 요금에 미치는 영향

호텔의 온라인 예약 시스템 정보가 객실 요금에 미치는 영향

Algarve hotel price determinants: A hedonic pricing model

This study sought to assess customers' willingness to pay for a wide variety of characteristics and attributes of hotels in Portugal's Algarve region. After collecting nearly all the information available on TripAdvisor for hotels in this region, a hedonic pricing model was developed using a database of 9992 cases. The results suggest that – after standardisation – the most important variable shaping Algarve hotel room rates is the previous day's prices. When associated with a family-friendly hotel, star category and services have a greater value than beaches or golf courses do. Customers also appreciate some types of hotels, such as boutique, quaint or trendy hotels, but view others negatively, such as family-friendly or business hotels. Only the specific location of Falesia Beach adds value, although the Algarve is a desirable destination overall. Both destination and hotel managers can use the proposed method to analyse data for their region on customers' propensity to pay.

The Influence of Hotel Attributes on Room Rates. The Case of Bucharest

Located in the southeast of Romania, Bucharest is the capital and the largest city in the country. Economically, Bucharest is the most prosperous city in Romania. During the last years, this city faced one of the highest growths in the number of hotels. Nowadays, due to the development of Internet-based technologies, the reservation process has changed; travelers can easily get information about the experience of other guests and also compare prices. The aim of the present paper is to analyze how prices for a hotel stay, in the city of Bucharest, can be influenced by some quality signaling factors, as star rating, online consumer’s ratings and the number of consumer’s comments. By using a multiple regression model for 3 to 5-star hotels in Bucharest, we identify, on one hand, the factors that have a positive influence on hotel room rates and, on the other hand, the factors that have a negative impact on the consumer’s willingness to pay. Our main results supply signals to hoteliers concerning the attributes most valuable for consumers which can lead to a higher room rate premium.

PENERAPAN ACTIVITY BASED COSTING SYSTEM DALAM MENENTUKAN HARGA POKOK KAMAR HOTEL (STUDI PADA HOTEL GREEN EDEN MANADO)

The Activity of Based Costing (ABC) Method is a simple calculation to determine the cost of price / services to explain that the activity were the reason one to make rise the cost of the products, and products that consume activity.The hotel can use Activity Based Costing (ABC) System Method to determine hotel room rate because when they use the Activity economic method in detail, the quality of decision can be improve to be better and making more accurate. The purpose of this research is “to obtain the accurate information about Activity Based Costing” in counting the cost calculation rooms Hotel Green Eden Manado since from June, July, and August 2017. The method of analysis that I used is “Descriptive Analysis Method”, by conducting to interview to the hotel manager and doing the data collection regarding the costs and amounts of fees. Based on the analysis, there are find that Activity Based Costing System for the month of June. Superior room type, Deluxe room and Suite resulted that the cost of price rooms were lower to compared with the cost by hotel management. For July the calculation of the cost Superior room type was higher than the cost of calculated by the management Hotel. And for the type of Deluxe rooms and Suite rooms were lower to compared with the cost by the Hotel. And for the month of August the calculation for Superior, Suite, and Deluxe rooms resulted that the cost were higher than the cost calculation used by The Hotel Management.Keywords : Activity Based Costing, The cost of rooms.

Online hotel ratings and its influence on hotel room rates: the case of Lisbon, Portugal

Lisbon is one of the European Union cities that has one of the highest growth in the number of hotels. With the digital revolution travelers can easily not only compare prices but also get information about the experience of other guests which can influence prices. The aim of this paper is to analyze how prices for a hotel stay can be influenced by some quality signaling factors, as star rating and online consumer’s ratings (location, cleanliness, comfort, facilities, staff and value for money, available on Booking.com), the volume of consumer’s comments and the availability of rooms in Lisbon. For 151 hotels in Lisbon, from 3 to 5 stars, through a multiple regression model, the results suggest that hotel category, location and facilities ratings have a positive influence on hotel room rates, but higher trade-off between what clients pay and the guest hotel stay experience has a negative impact on the consumer’s willingness to pay, as well as the number of comments. Among different hotel categories, the influent factors are different. Our main findings provide signs to hoteliers to take corrective actions towards the attributes most valuable for consumers and that can provide a higher room rate premium.

Myth of early booking gains

This paper investigates the relationship between booking lead time and hotel room rates while controlling for various booking, room and hotel characteristics. Data are based on big data drawn from a hotel reservation database covering about 123,000 bookings over a 5-year period. Quantile estimations for online bookings show that early bookings are associated with the highest room rates, while late bookings have the lowest ones. For lower priced rooms of leisure guests booked offline, there is a U-shaped relationship with the lowest prices booked between 10 and 24 days before the check-in day. Similarly for business guests, a U-shaped pattern can be found for high-priced bookings. Overall, price variations between bookings at different points in time range between 10% for external online bookings and up to 28% for offline bookings of leisure guests. The results for hotel bookings stand in contrast to empirical evidence for airfares and train tickets.

Evaluating the impact of mega-sporting events on hotel pricing strategies: the case of the 2014 FIFA World Cup

PurposeThis study aims to examine the impact of a mega-sporting event “2014 FIFA World Cup” on hotel pricing strategies and performance.Design/methodology/approachThe present project examines the host regions’ response to the 2014 FIFA World Cup which was established by the variance in the main hotel key performance indexes: occupancy, average daily rate, revenue per available room (RevPAR) and supply. Using data gathered from STR, this research distinctly shows how the Brazilian host regions reacted to the World Cup.FindingsResults suggest that the key performance indicators of Brazil’s lodging sector reacted differently to the World Cup. Although all hosting cities experienced significant RevPAR growth because of the increase in hotel room rates during the event, the supply and occupancy performed differed from each city.Research limitations/implicationsResearch is limited to the case of hotel performance at the country level for mega-events. The study focused on the reaction of revenue managers in the Latin America context. Other contexts may generate different results.Practical implicationsThe study helps revenue managers to examine how the FIFA World Cup travel demand affected pricing strategies and revenue management practices in the Brazilian hotel sector in areas undergoing seasonal growths in overnight tourism. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events.Social implicationsThis study reveals that the benefits brought by a mega-event are not always translated into strong hotel revenue performance. This study highlights an important but understudied research area of revenue management pricing strategies and the effect of mega-sporting events in the hotel sector. This study contributes to the literature as one of the few investigations to benefit hotel pricing strategies and overall revenue performance.Originality/valueThis study is one of the few studies about exploring the reaction of revenue managers during the execution of a mega-sporting event. The value of the present study lies in the fact that the authors extend previous studies examining the impact of the most important sporting event in the hotel industry at the country-level perspective. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events.