Room Prices Research Articles

Unveiling customer choice with salience theory: The link between room price and breakfast demand

Salience theory posits that decision-makers pay more attention to the most outstanding—salient—attributes of available options, ultimately impacting decision-makers’ choices. This study proposes extending this theory to the decision of adding an extra component to a product, with special significance for the hospitality industry. Hotels tend to charge a fixed amount to add breakfast to a reservation. Drawing on the salience theory, we show that this constant surcharge makes the demand for breakfast-included rooms dependent on the room’s price. The empirical application conducted on a sample of over 22,000 reservations supports the predictions that the probability of selling breakfast-included rooms rises (1) after a room price increase and (2) less so if consumers do not anticipate the price hike. Beyond the critical theoretical extension, this paper brings relevant managerial implications for dynamic pricing strategies for breakfast, which, in turn, may become a game changer for hotel revenue management strategies.

Analyze Factors Affecting Room Pricing of Accommodation in Luang Prabang Province

The study of “Analyze Factors Affecting Room Pricing of Accommodation in Luang Prabang Province”. The objectives of the study are the overview Luang Prabang tourism, hotel and guesthouse statistics, in particular to investigate the way which room rates are determined. Data was collected from Agoda website by survey in May 2108. The sample size is 204 hotel and guesthouse that consists of 1,326 observations. Based on Hedonic Pricing Model for estimation and data analyzing for Ordinary Least Square (OLS) by Stata 13. Our result of finding included that there were 643,319 tourists (2016) from domestic and foreign countries. The total number of hotels and guesthouses accounted for 415 (2016) which includes 65% and 35% of domestic and foreigner firms respectively. The room rates of hotel and guesthouse are between $ 2 and $ 400 per night. The results illustrate that the factors determined the hotel and guesthouse room rates in Luang Prabang are 17 variables; for instance, colonial style, deluxe room, river view, room size, number of rooms, guest limited, bed king, wooden parquet floor, free cancellation, car park, front desk 24 hours, swimming pool, and massage. Which these variables are most statistically significant. Furthermore, the symbol of variables is similar on our prediction; expecting some variables are the heritage site area, Wi-Fi and 24 hours security which is not statistically significant. In addition, Free airport transfer service is statistically significant; apart from, the symbol of variable is not the same on our prediction.

Pricing Decision and Cancellation Strategy Selection of ''Hotel+Online Platform''

Based on the consumer's cancellation behavior, a “Hotel + online platform” dual-channel supply chain model consisting of a single hotel and a single online platform is constructed, based on the theory of consumer utility, this paper constructs the demand for rooms in the supply chain, and analyzes the profit of the hotel side, room pricing and cancellation strategy under the competition-cooperation relationship by using the Stackelberg game model. The research shows that in the hotel's dual-channel supply chain, the selection of unsubscribing strategy for official direct sales channels and online agency platforms and the pricing of rooms are affected by the probability of unsubscribe, the cost of unsubscribing, consumers' preference level for online platforms and commission rates; when both direct sales channels and online platforms adopt non-unsubscribe strategies, the profits and pricing of both parties are independent of the cost of unsubscribing. When the hotel direct sales channel adopts the unsubscribed strategy, then the room price increases with the increase of the cost of unsubscribing; at the same time, when the online platform chooses the unsubscribed strategy, the preferential amount is decreases with the increase of the cost of unsubscribing; on the contrary, it increases with the increase of the cost of unsubscribing. When consumers have a high preference level on the online platform, the strategy is the optimal strategy.

Qualitative Insights Into the Impact of Room Pricing and Facilities on Hotel Guest Satisfaction

Qualitative Insights Into the Impact of Room Pricing and Facilities on Hotel Guest Satisfaction

The Legitimacy Boundary of Government Intervention in Price

The tourism market has become an important driving force for local economic growth, thus local governments have intensions to promote the development of local tourism industry by intervening in tourist hotel room prices during major holidays. Through four events, three modes of local government intervention in hotel prices can be summarized: first, the government takes administrating price replaces the market regulation price mechanisms; second, the government takes restrictions on the pricing rights of operators while maintaining market regulation price mechanisms; third, under the market regulation price mechanisms, the governments exhort operators to exercise price self-discipline. The second model contains potential risk of breaking price rule of law because price mechanism and pricing rights of operators are confirmed by constitution. The three modes have caused intuition chaos between regions and make a consequence in dividing the nationwide tourism hotel market into fragments. Under the requirement of constructing unified national market, the order of hotel price should be maintained from unified, legal, and diverse dimension.

Timing of hotel bookings: not monotonic

ABSTRACT Room price and availability are important determinants of the timing of hotel bookings. However, their effects over time cannot be viewed as monotonic. Travelers book earlier when their target hotel charges higher prices than others only when their day of arrival is far away. Travelers book earlier when their target hotel is less available than others only if their target arrival day is less than two months away. Travelers also book earlier if they intend to travel with a child or other companions and stay for more nights. Furthermore, traveler booking lead times significantly increase the probability of actual check-in.

Research on Hotel Room Pricing and Cancellation Policy Strategies Based on Consumer Cancellation Behavior

Research on Hotel Room Pricing and Cancellation Policy Strategies Based on Consumer Cancellation Behavior

FairPlay: A Multi-Sided Fair Dynamic Pricing Policy for Hotels

In recent years, popular touristic destinations face overtourism. Local communities suffer from its consequences in several ways. Among others, overpricing and profiteering harms local societies and economies deeply. In this paper we focus on the problem of determining fair hotel room prices. Specifically, we put forward a dynamic pricing policy where the price of a room depends not only on the demand of the hotel it belongs to but also on the demand of: (i) similar rooms in the area and (ii) their hotels. To this purpose, we model our setting as a cooperative game and exploit an appropriate game theoretic solution concept that promotes fairness both on the customers' and the providers' side. Our simulation results involving price adjustments across real-world hotels datasets, confirm that ours is a fair dynamic pricing policy, avoiding both over- and under-pricing hotel rooms.

To be honest or positive? The effect of Airbnb host description on consumer behavior

On accommodation-sharing platform, host self-description influence consumer behavior as an important information. Based on the Perceived Value Theory and the Expectation Confirmation Theory, we developed an analytical framework to investigate the relationship between host description strategies and consumer behavior of room booking and satisfaction. We measured host description strategies (honest description and positive description) using machine learning and rule-based text analysis methods. Then we verified the different effects of two host description strategies on each of consumer behaviors based on a panel dataset from Airbnb. Positive description and honest description have a positive impact on room booking and consumer satisfaction respectively. Room price moderates the relationship between host descriptions and consumer behaviors. A highly positive description strategy can promote bookings for high-priced listings but decrease satisfaction. The honest description strategy has a positive effect on the bookings of low-priced listings. This study contributes to tourism literature and property hosts in practice.

Exploring ADR Trends: A Data Mining Approach to Hotel Room Pricing, Cancellations, and EDA

Exploring ADR Trends: A Data Mining Approach to Hotel Room Pricing, Cancellations, and EDA

Investigating stimulating factors for customer booking intentions on brand websites

ABSTRACT Customers have ample opportunities regarding channels to use to book a hotel room: offline and online. In the online world, the options are using the hotel’s website, referred to as the brand website, or third party internet sites like online travel agencies (OTAs). The primary objective of this article is to explore the motivators and factors that influence customers in booking hotel rooms through a brand website. Additionally, the study aims to derive insights from the exemplary practices employed by online travel agencies that contribute to their significant share in capturing online bookings. This study relies on the opinions from 110 participants who frequently reserve their hotel accommodations through Booking.com, booking more than once annually for leisure or vacation purposes. Using an online booking channel requires that the booking tool is perceived as user-friendly and trustworthy and offers a comparison of prices. The benefits of a loyalty programme, integration with other travel-related services and hotels paying commissions are the least important to customers. The primary motivator to book via a brand website is the personal contact and the best price. To achieve this, the hotel needs to make sure that the website is easy to use, offers possibilities for comparison of prices and reviews, is mobile friendly and accepts other payments besides credit cards. Currently, a primary disappointment is the quality of the brand website and, therefore, being perceived by the customer as not user-friendly. Hotels should analyse their brand website’s five elements: room price, payment options, user-friendliness, trustworthiness, reputation and visuals to encourage bookings and enhance customer experience.

Chateau de Montana: Applying Data Analytics to Simulate Room Price of a Repositioned Hotel

Nicolas Dupont, the owner of Chateau de Montana, a struggling (and old) boutique hotel in Crans-Montana Ski Resort, Switzerland, wished to renovate and reposition his family-owned hotel to target higher room rates. Dupont commissioned Olga Mitireva and Yulia Belopilskaya as consultants to assess the proposition. The consultants had to extract cues for the room rate of the repositioned hotel from comparable hotels. However, the room rates varied significantly across similar hotels due to their differing characteristics and locations. It was a cognitive challenge to read the patterns from a few comparable hotels. They collected the data of 200 hotels from similar locations and simulated room prices using hedonic regression models.

Price dispersion across online platforms: evidence from hotel room prices in London (UK)

ABSTRACT This paper studies the widespread price dispersion of homogeneous products across different online platforms, even when consumers can easily access price information from comparison websites. We collect data for the 200 most popular hotels in London (UK) and document that prices vary widely across booking sites while making reservations for a hotel room. Additionally, we find that prices listed across different platforms tend to converge as the booking date gets closer to the date of stay. However, the price dispersion persists until the date of stay, implying that the law of one price does not hold. We present a simple theoretical model to explain this and show that in the presence of aggregate demand uncertainty and capacity constraints, price dispersion could exist even when products are homogeneous, consumers are homogeneous, all agents have perfect information about the market structure, and consumers face no search costs to acquire information about the products. Our theoretical intuition and robust empirical evidence provide additional insights into price dispersion across online platforms in different institutional settings. Our study complements the existing literature that relies on consumer search costs to explain the price dispersion phenomenon.

Currency conundrum: unraveling the impact of exchange rates on Nordic hotel pricing, occupancy, and revenue in Finland, Norway, and Sweden

ABSTRACT The analysis is aimed at comprehending the interplay between exchange rates, hotel pricing, occupancy, and revenue per available room in three Nordic countries (Finland, Norway, and Sweden) using a novel approach of dynamic common correlated effects that can handle cross-sectional interdependencies, variations, and dynamics within the data. The paper finds that exchange rate appreciation has a significant adverse outcome on hotel occupancy rates but a positive effect on revenue per available room. In contrast, exchange rate fluctuations did not significantly impact hotel room prices, implying that hotels in Nordic countries can effectively consider the asymmetric influences of exchange rate fluctuations in setting room prices. The paper discusses implications for hotel managers and policymakers in coping with exchange rate fluctuations and optimizing hotel pricing.

How Room Rates Drive Occupancy:

The occupancy rate is a key success indicator for a hotel. It reflects the extent to which rooms are sold in comparison with the total number of rooms available, measured on a daily, monthly, and annual basis. When a hotel aims to maximize room occupancy and room revenue, a well-planned marketing mix strategy is crucial, especially in terms of pricing. Setting the right price is a significant challenge for a hotel: it should not be seen as too cheap or too expensive by consumers, while still providing a profit for the company and not putting it at a disadvantage compared to competitors. Therefore, mistakes in pricing can significantly affect a hotel's occupancy rate.
 This study aims to understand the influence of room rates on occupancy at The Laguna, a Luxury Collection Resort & Spa. The data collection method in this research involves the use of secondary data about prices and occupancy rates. The data analysis techniques used include classic assumption tests, simple linear regression analysis, correlation coefficient analysis, determination coefficient analysis, and t-tests, assisted by the SPSS version 25 software program. The results of this study indicate that room pricing (X) has a significant effect on occupancy rates (Y), as evidenced by a significance value of 0.00, which is less than 0.05, and a t-value of 6.388, which is greater than the t-table value of 2.021. Based on the determination analysis results, room rates have a strong influence of 64.60% on room occupancy, while the remaining 35.40% is influenced by other factors not tested in this study, such as product, service quality, and promotion.

Self-Adjustment Strategies of International Chain Hotels in Surabaya during the New Normal Era

The Covid-19 pandemic severely impacted Indonesia's tourism industry, resulting in a sharp decline in hotel room occupancy rates in Surabaya. To recover, hotels adopted strategies. This article examines how hotels affiliated with international brand networks coped with the pandemic. The study focuses on Quest Hotel and Holiday Inn Express Surabaya CenterPoint, both renowned for their star ratings and business hotel concept in the city centre. Research revealed a significant drop in room occupancy rates during the pandemic. Strategies included strict adherence to health protocols, salary adjustments without altering service charge calculations, limited use of hotel facilities, showcasing health and cleanliness certifications on promotional materials, flexible booking periods, room price promotions, and non-room product sales. These measures aimed to prioritize guest safety, increase revenue, and adjust to the pandemic's impact. Implementing these adaptations, the hotels aimed to position themselves for recovery and success in the new normal era.

Analisis Penentuan Harga Kamar Hotel Dengan Fuzzy Logic Metode Sugeno Berdasarkan Kebutuhan Pelanggan Di Kota Batam

Determining the right hotel room pricing is a critical aspect of hotel management. In Batam City, a popular destination for both tourism and business, adjusting hotel room prices based on customer needs has become increasingly important. This research focuses on the utilization of Fuzzy Logic Sugeno Method to analyze and determine hotel room prices that can be tailored to the preferences and requirements of customers in Batam City. The Sugeno Method is a powerful technique in fuzzy logic that allows for qualitative modeling of customer preferences. This research integrates historical hotel room data, weather data, city event data, and customer preferences collected through surveys and sentiment analysis. Subsequently, this method is employed to generate membership functions that link input variables, such as weather, to the output variable, which is hotel room price. The research findings demonstrate that this approach can yield hotel room prices that are more aligned with customer preferences based on factors such as weather and city events. This aids hotels in Batam City in optimizing their revenue by offering competitive and enticing prices to potential customers. This research makes a significant contribution to the development of smarter pricing strategies in the hotel industry, with a focus on customer satisfaction and revenue enhancement.

Balancing short-term gains and long-term success in lodging: The role of customer satisfaction and price in hotel profitability model

This study examines the relationship between revenue and profit drivers and long-term financial performance in the hotel industry based on 17-years data (2004–2020) of six US hotel chains. The analysis creates, tests, and analyzes a cross-level model that examines the complex endogenous relationships, underlying long-term financial performance of hotels. Specifically, we examine the interaction of room price (ADR) and customer satisfaction (ACSI) within a sales-volume-driver framework that impacts financial performance through profitability, measured at both the operating and accounting levels. This study seeks to advance our understanding of these relationships, their characteristics, and their implications for long-term financial performance in the hotel industry. The findings reveal that customer satisfaction is more important than price in achieving long-term financial success in the hotel industry, whereas room nights sold is significant positive driver of all performance levels.

The Influence of Service Quality and Room Rates on Guest Loyalty at UNP Hotel & Convention Center

Purpose: This study aims to elucidate the profound influence of service quality and room rates on hotel guest loyalty within the context of UNP Hotel & Convention Center. Method: Employing an explanatory research design with a quantitative approach, this study examines the interplay between service quality, room rates, and hotel guest loyalty. The study focuses on a population of repeat guests at UNP Hotel & Convention Center. Data was collected from 50 respondents through purposive sampling using a meticulously designed questionnaire. The collected data was subjected to descriptive analysis and path analysis, with the proposed model evaluated using the Smart Partial Least Squares Structural (PLSS) assessment. Results: The findings underscore a compelling and statistically significant correlation between service quality, room rates, and guest loyalty. This highlights a crucial implication for the hotel industry to prioritize and meticulously manage service quality and room pricing in order to foster and amplify guest loyalty. Contribution: This research underscores the pivotal role of service quality and room rates in nurturing guest loyalty at UNP Hotel & Convention Center. The study reaffirms that guest loyalty is intricately tied to the anticipated service quality and pricing. As such, maintaining service quality at par and ensuring competitive room rates could potentially lead to higher guest retention and choice of the hotel. Conversely, a decline in either service quality or competitive pricing may precipitate diminished guest loyalty

A hedonic analysis of the determinants of hotel room rates in the Greater Gaborone Region (Botswana) using quantile regression

PurposeThe purpose of this study is to examine the influence of key hotel attributes on the room rates of selected hotels in the Greater Gaborone Region, Botswana.Design/methodology/approachUsing hedonic pricing analysis, the effect of eight attributes collected from 80 standard double rooms on Booking.com in the area was analysed using quantile regression.FindingsThe estimated results from quantile regression suggested the importance of the 10th quantile as the best predictor of hotel room price distribution. Overall, the presence of a fitness centre and the availability of meeting and conference facilities were positively significant for the lowest- and premium-priced hotels, respectively.Research limitations/implicationsThe study advanced the literature in hedonic pricing models by confirming the applicability of hotel room rate attribute research in unexplored environments.Practical implicationsHotel managers should be aware of the influence of key attributes, such as meeting and conference space availability and locational factors, on the pricing decisions of room rates in the Greater Gaborone Region. The study also presented opportunities for business-to-business marketing between hotel and tour operators in the region.Originality/valueThe study is one of the few that uses quantile regression in the hedonic pricing analysis of hotel room rates.