Strategic and tactical price decisions in hotel revenue management

Graziano Abrate, Giampaolo Viglia

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    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 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
    Early online date23 Feb 2016
    Publication statusPublished - Aug 2016


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


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