Strategic and tactical price decisions in hotel revenue management

Graziano Abrate, Giampaolo Viglia

    Research output: Contribution to journalArticlepeer-review

    1848 Downloads (Pure)

    Abstract

    Dynamic pricing techniques allow using a number of variables in a tactical way compared to standard catalogue prices. This study merges in a conceptual model the relevance of the tactical and the strategic dimension of these variables, classified according to their tangible, reputational or contextual nature.

    To empirically validate the hypotheses, a database of 21.596 price observations was retrieved from booking.com. The study presents a hedonic price function, using the Shapley-Owen decomposition of the R-squared to elicit the importance of each group of factors. Further, a hierarchical cluster analysis measures the presence of heterogeneity across operators.

    The results show that online reputation is gaining importance over the traditional star rating. Despite the tangible variables remain of paramount importance, the findings suggest the relevant role of contextual variables in short-run price variations. The players operating in the tourism and hospitality industries should integrate these findings when designing pricing strategies.
    Original languageEnglish
    Pages (from-to)123-132
    Number of pages10
    JournalTourism Management
    Volume55
    Early online date23 Feb 2016
    DOIs
    Publication statusPublished - Aug 2016

    Keywords

    • Dynamic prices
    • Competition
    • Online reputation
    • Hedonic pricing model
    • Shapley-Owen decomposition

    Fingerprint

    Dive into the research topics of 'Strategic and tactical price decisions in hotel revenue management'. Together they form a unique fingerprint.

    Cite this