Strategic and tactical price decisions in hotel revenue management.

Abrate, A and Viglia, G., 2016. Strategic and tactical price decisions in hotel revenue management. Tourism Management, 55, 123 - 132.

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DOI: 10.1016/j.tourman.2016.02.006

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 Rsquared 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.

Item Type:Article
ISSN:0261-5177
Uncontrolled Keywords:Dynamic prices; competition; online reputation; hedonic pricing model; Shapley-Owen decomposition
Subjects:UNSPECIFIED
Group:Faculty of Management
ID Code:23155
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:25 Feb 2016 14:42
Last Modified:20 Apr 2016 12:48

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