Investigating Rate Integrity in Convention Cities

Abstract

Yield Management (YM) is the utilization of tactics to align a consumer product within the market for profit maximization. By evaluating how rates are quoted to consumers, the effectiveness of YM tactics can be delineated. This study compared central reservation (CR) telephone and Internet room rates by city. The CR centers for full-service hotels in 19 different cities were contacted by telephone to request a room. The CR rates were compared to rates obtained from the hotels' Internet sites. The data analysis found significant differences in reservation rates by city and by size of the lodging property. Hoteliers can use the information to evaluate the effectiveness of their YM systems.     

Modeling hotel room price with geographically weighted regression

Insufficient attention has been given to hotel-room-price attributions and its mechanism in the lodging research field till now. This article examines how site and situation factors differently affect lodging industry and room prices. Comparative analysis of four hedonic price models has been conducted to investigate how these attributions influence room price of Beijing's hotels above star three. Spatial autocorrelation in hotel prices and in hedonic room price equation residuals were analyzed in this research too. Some conclusions can be found and summarized: according to the estimated results, for specific locales, the results expressed in a global model might be inaccurate. The fitting coefficient of geographically weighted regression demonstrates the importance of going beyond the global modeling framework when incorporating geographically weighted regression into hedonic price model. At last, an innovative method for determining the influence of a hotel's attributes at market rates on its’ values, or implicit prices was put forward by the authors.     

Measuring spa-goers’ preferences: A conjoint analysis approach

The spa market has been growing tremendously in the Asia-Pacific region. Besides its growth potential in the tourism industry, spas are becoming important revenue centers for hotels and resorts. Despite the enormous growth and potential of the spa market, the preferences of spa-goers are overlooked. The aim of this research is thus to fill this gap in theory and practice by spa-goers’ preferences based on their preferred combination of spa attributes. The study is exploratory in nature and adopts a conjoint approach to analyze the preferences of the spa-goers. The findings reveal that mid-level prices, a high level of therapist qualifications, a high level of privacy, a full range of spa facilities, and branded spa products are preferred by customers. Moreover, therapist qualifications, price, and level of privacy are found to be the most important attributes in making spa bookings. Paper also examines the relative importance of different spa attributes to spa-goers of different sociodemographic backgrounds and spa visit characteristics.     

Re-examining the market structure effects on hotel performance using market share inequality

Previous studies have suggested that the Herfindahl–Hirschman Index (HHI) does not adequately account for market structure. To remedy this problem, this article further decomposes the HHI into two components: the number of competitors and market share inequality. Using the metropolitan-level data of tourist hotels in Taiwan, this article estimates the effect of these variables on hotels’ profits. This article shows that while a single measure of the HHI does not have a significant effect on hotels’ profits, decomposing HHI leads to different results. It shows that increasing the number of competitors may improve hotels’ profitability, and by contrast, greater inequalities in market shares may be detrimental to the profit in the room market.     

Pricing determinants in the hotel industry: Quantile regression analysis

Due to the skewed distribution of hotel prices, quantile regression provides a more flexible and complete characterization of the determinants of the hotel prices at the higher and lower tail of the distribution. This study applies quantile regression approach to investigate the major determinants of hotel room pricing strategies. The ordinary least square regression is also used for comparative purposes. The data are drawn from 58 international tourist hotels in Taiwan and average room rate (ARR) is used as the proxy of hotel room price. The results of OLS and quantile regression share common characteristics but also have differences in some aspects. The OLS results reveal that number of rooms, hotel age, market conditions and number of housekeeping staff per room are the main attributes of hotel room rate. The quantile regression results further demonstrate that room number and the number of housekeeping staff per guest room do not significantly influence hotel price at the low price quantile. Hotel age and market conditions are only significant determinants in high-price category. Additionally, for the high-priced quantile hotels, the proportion of foreign individual travellers positively and significantly influences room price. The empirical results can help hoteliers in shaping investment and pricing strategies.     

Market demand variations,room capacity,and optimal hotel room rates

This short note develops an optimal hotel room rate model and proposes optimal room rate strategies in both high and low seasons. We then examine our model with the data from tourist hotels in Taipei, Taiwan. The empirical results support our model's major predictions: (1) market demand variations significantly affect the difference between high season and low season optimal room rates; and (2) hotel's room capacity negatively affect the difference between high season and low season optimal room rates, which also means that fixed costs shall negatively affect the high season optimal room rate. This result contradicts with conventional wisdom.     

大型展会对高星级酒店房价影响的空间分析——以第100届广交会为例

大型展会作为会展业中的重要内容,对城市住宿接待业的影响非常明显,特别是对酒店房价的影响成为备受关注的问题.本文以第100届广交会为例,采用深度访谈、二手资料分析等方法搜集大量的基础资料,探讨广交会对于高星级酒店房价影响的空间规律.结果显示:(1)房价影响的总体空间范围为广州市及佛山、东莞等部分周边城市,符合距离衰减规律;(2)房价影响的市区空间范围同时受流花馆和琶洲馆(即琶洲新会展中心)影响,但两者的影响各有其侧重;(3)市区空间范围内单个酒店的房价涨幅与流花馆之间的距离,5分钟车程范围内符合距离衰减规律,超过5分钟则规律比较模糊.最后,本文对于相关结论进行了尝试性的解释和探讨.     

The effect of idiosyncratic price movements on short- and long-run performance of hotels

It is a common belief that businesses performance should not be evaluated by immediate fiscal returns, but rather based on an extended time horizon. While the literature implies that pricing decisions may exert lagged as well as contemporaneous effects on performance, a limited number of empirical studies have focused on such effects. The current study investigates effects of idiosyncratic price movements on short-run and long-run hotel performance, where idiosyncratic price movements refer to the changes in individual hotels’ room rates unexplained by price competition, product differentiation, and market conditions. By analyzing spatial panel data from the Houston lodging market between 2005 and 2014, we find that idiosyncratic price movements enhance hotel performance in the short-run and that adverse effects followed in the long-run. Findings of the study and implications for practitioners are discussed along with suggestions for future research.     

Determinants of revenue per available room: Influential roles of average daily rate,demand, seasonality and yearly trend

Determining price per room to be charged to customers is an important decision to be taken by hotel management. Hotels frequently change their room rates based on the demand of room, occupancy rate, seasonal pattern, and strategies undertaken by other hotels on pricing. We formulated four models to analyse how various influencing variables, such as hotel price, demand, yearly trend and monthly seasonality influence hotel revenue per available room (RevPar). To analyse a case, we used monthly accommodation statistics for Sweden taken for Swedish Agency for Economic and Regional Growth and Statistics from January 2008 to July 2017. We carried out data analysis using both multiple regression and Multivariate Adaptive Regression Splines (MARS) model and found that application of MARS can help establishing a nonlinear relationship of RevPar with other determining variables in a superior way. We also proposed the possibility of developing a better forecasting model using MARS.     

Predicting Hotel Choice Decisions and Segmenting Hotel Consumers: A Comparative Assessment of a Recent Consumer Based Approach

Abstract

Given the intensified competition to attract today's increasingly discerning hotel guests, it is vital for hotel managers to understand the set or bundle of hotel attributes which are demanded by the potential traveler. Unfortunately, marketing research in hotels is still mainly confined to the analysis of guest-related data collected during registration or from guest comment cards. These data, however, have little merit as predictors of customer behaviour and cannot answer the “what if” questions. In recent and past research in hospitality and tourism, researchers have demonstrated the use of product attributes in predicting consumer preferences and segmenting markets (Bell and Morey 1997; Kim 1996). In undertaking this approach to behavioral study, many researchers in the field have been attracted to use conjoint attribute part-worths, (the judgmentally quantified attribute valuesderived from conjoint modeling. This study attempts to utilize the compositional self-explication model as a reference model to assess the comparative superiority of the conjoint model in predicting client preferences among travelers to Hong Kong. It also seeks to reveal subgroup preference variations by using two segmentation approaches. The overall finding indicated that the most important hotel attribute sought by all respondents is Room Rate, followed by Star Rating, Location, Brand and Room Type. In terms of market segments, the results revealed similar preference profiles among leisure, short-haul and infrequent travelers as one group and business, long-haul and frequent travelers as another.     

A comparison of destinations’ impacts on hotel rates

The impact of destinations’ attributes on hotel rates in different locations has been insufficiently compared the existing literature. This study sought to apply the hedonic pricing method to measure and compare how room prices are affected by factors that are both external and inherent to hotel companies. After collecting nearly all the data regarding hotel features that consumers can use to make choices about accommodations on the TripAdvisor website, different models were developed for each city and season. The results suggest that hotels in Barcelona are more dependent on external conditions than hotels in Madrid are. In addition, hotels in both cities are more affected by external conditions during the high season. This paper discusses these and other results, as well as their implications.     

How do hotels adapt their pricing strategies to macroeconomic factors?

The hospitality industry is naturally highly sensitive to subtle changes in the external environment, and its performance is affected by various external factors. Therefore, hoteliers should carefully monitor the various macroeconomic indicators affecting the market, when making important strategic management decisions. In particular, hotels’ pricing decisions are important because they play a crucial role in the determination of hotel revenue and in the process of profit maximization. In this paper we classify hotels by business model (i.e., chain management, franchise and independent) and analyze how these different types of hotels in Switzerland adapt their pricing strategies to macroeconomic factors (i.e., exchange rate, room supply and market demand). We find that hotels adopting different business models react differently to the same macro shock. Implications of our findings and future research directions are discussed.     

Loyalty Runs Deeper than Thread Count: An Exploratory Study of Gay Guest Preferences and Hotelier Perceptions

Alongside many global businesses, hotels have recently shared in the movement to serve the gay market. If the perception of being gay-friendly is not the same for hoteliers and their gay guests, a marketing discrepancy may exist and loyalty of the gay segment could be at risk. To address this issue, a sample of 188 gay guests and 48 hoteliers was explored. Differences tests were conducted to evaluate the hotel attribute importance ratings of gay guests versus hoteliers when considering that segment. After conducting a factor analysis, a regression determined the impact of each factor on gay guest loyalty, with the social environment component having the greatest impact. Most importantly, hotels should support the gay community beyond simply offering a room, an intangible yet important display of social responsibility. This study augments previous hospitality research on the gay guest segment and provides avenues for future qualitative and quantitative studies.     

Dual-branded hotels: Resource-based entry strategies in agglomerated markets

Despite the growing importance of dual-branded hotels, research on this trend is lacking. This study investigates the effect of resource-based entry strategies for dual-branded hotels vis-à-vis incumbent market competition on performance. Using a hierarchical linear model, we found that best performance is achieved by dual-branded hotels that pursue a diversification strategy by entering the market with one brand above and one brand below the mode class of the market. Dual-branded hotels can thus achieve competitive advantage by exploiting superior financial resources and tourism destinations are able to gain monetary advantage from resources employed by dual-branded hotels. This study extends current research on dual-branded hotels by investigating entry strategies and contributes to the resource-based view literature by investigating dual-brands’ resource exploitation and resource spillovers in agglomerated markets.     

Determinants of Customer Satisfaction in the Hotel Industry: An Application of Online Review Analysis

This study illustrates that determinants of customer satisfaction in hospitality venues can be identified through an analysis of online reviews. Using text mining and content analysis of 42,668 online traveler reviews covering 774 star-rated hotels, the study found that transportation convenience, food and beverage management, convenience to tourist destinations and value for money are identified as excellent factors that customers booking both luxury and budget hotels consider important and for which the performance is much satisfactory to them. Customers paid more attention to, but were less satisfied with, bed, reception services and room size and decoration. Most determinants of customer satisfaction also showed a consensus over luxury versus budget hotels, except for factors referring to lobby and sound insulation. As per its findings, the article concludes by presenting theoretical and managerial implications.     

The Channel That Offers the Lowest Online Room Rates: A Case Study of Hotels in Hong Kong

Online distribution channels increasingly serve as platforms hotels can use to offer competitive room rates to attract price-sensitive customers and maximize yield. Capturing the lowest and highest daily room rates over a 360-day period from five of the most popular online travel agencies, and two batches of data showing the lowest room rates over 28 days from a last-minute bookings website, this study compares the lowest prices offered. The results indicate that no single online channel outperforms the others in any of the hotel star-rating categories, and that the last-minute reservation service provides the lowest hotel room rate across different star ratings.     

An analysis and assessment of environmental operating practices in hotel and resort properties

The objective of this research study is to examine the environmental operating practices of hotels and resorts to identify common operating activities and examples of ‘best practices’. The findings illustrate a lack of systemized measurement and documentation of utility consumption rates and costs in individualized properties. This study also finds that corporate benchmarks for utility consumption are not effective benchmarks for nonaffiliated hotels and resorts to achieve. This study also finds that the education of hotel owners and operators is the key to understanding the benefits of implementing environmental management practices.     

Multiattribute Decision Making Analysis for Customer Preference of Tourist Hotels

This study focuses on perception of hotel attributes that affect the selection of tourist hotels. These hotel service attributes are further categorized into seven hierarchies: business image, hotel location, service attitude, room service, beverage and food service, hotel facilities, and hotel environment. These hierarchies include twenty-seven evaluation items. Analytic Hierarchy Process method and multiple attribute utility function have been utilized to evaluate customer preference of hotels. Then, we conducted a thorough perception consciousness investigation of service quality to assess customer evaluation and preference of service attributes, which led to an understanding of the factors that affect hotel selection     

How psychological and contextual factors contribute to travelers’ propensity to choose green hotels?

Despite the growing popularity of green hotels, there remains a dearth of research examining travelers’ intentions to choose green hotels. The study addresses this research gap by developing and testing an integrated model of green hotel behavior in an emerging market of India. We use a sequential approach of SEM and fuzzy set qualitative comparative analysis on 347 responses collected from Indian travelers to gain a more in-depth understanding of the role of biospheric value, green trust, willingness to pay premium, attitude, subjective norms, and perceived behavioral control in determining green hotel intentions. The findings show that presence of green trust is a significant and necessary condition for green hotel choice. Additionally, absence of willingness to pay premium, biospheric value, attitude, and subjective norm were found to deter travelers from choosing green hotels. These findings offer unique insights for managers in developing marketing strategies to enhance travelers’ green hotel adoption.     

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.