Using machine learning and big data for efficient forecasting of hotel booking cancellations

Cancellations are a key aspect of hotel revenue management because of their impact on room reservation systems. In fact, very little is known about the reasons that lead customers to cancel, or how it can be avoided. The aim of this paper is to propose a means of enabling the forecasting of hotel booking cancellations using only 13 independent variables, a reduced number in comparison with related research in the area, which in addition coincide with those that are most often requested by customers when they place a reservation. For this matter, machine-learning techniques, among other artificial neural networks optimised with genetic algorithms were applied achieving a cancellation rate of up to 98%. The proposed methodology allows us not only to know about cancellation rates, but also to identify which customer is likely to cancel. This approach would mean organisations could strengthen their action protocols regarding tourist arrivals.     

Globalization or localization of consumer preferences: The case of hotel room booking

The purpose of this study is to investigate potential differences in attitudes between Chinese and Western tourists towards various hotel room reservation policies. The study is meant to help the revenue managers of international hotel companies make informed choices on whether to pursue a globalized or a localized approach in the design of hotel room rates and rate restrictions. Three ranges of room prices and four types of rate restrictions are evaluated. The rate restriction policies considered are: a) rule type, b) advance requirement, c) refundability, and d) changes allowed. The results of customer surveys show that the Chinese and Western respondents do not express significantly different preferences concerning room rates, advance requirement, rule type, or refundability. They differ significantly only concerning the changes allowed policy. This result indicates that revenue managers of international hotel companies can take a globalized approach in designing rate restrictions. The identification of these customer preferences provides hotel revenue managers with empirical data on the attitudes of culturally diverse consumers, and this information can enable the design of hotel pricing policies that attract consumers in the global market.     

The impact of hotel CSR for strategic philanthropy on booking behavior and hotel performance during the COVID-19 pandemic

During the novel coronavirus (COVID-19) pandemic, some hotels have engaged in corporate social responsibility (CSR) activities to help overcome the crisis. Given that most existing research examines the impact of hotel CSR on a single stakeholder, how hotel CSR activities in a crisis are perceived by multiple stakeholders is unknown. Drawing on the concept of strategic philanthropy, this study examines the impact of hotel CSR activities during the pandemic, such as providing accommodations to healthcare workers, on hotel firms' market value and prospective hotel customers’ booking behavior. Adopting mixed-methods approach, this study finds negative impacts of hotel CSR for strategic philanthropy on firm market value and customer booking behavior. The study result indicates that the value of hotel CSR depends on the nature and environmental contexts of CSR. Specific theoretical and practical implications are provided.     

The effects of choice set size and information filtering mechanisms on online hotel booking

Online booking is one of the most popular ways of making reservations for hotel guests. Thus, hoteliers are paying increasing attention to hotel website information presentation and design. The purpose of this study, then, is to examine the joint influence of choice set size and information filtering mechanisms on consumers’ decision confidence towards online hotel booking. Choice set size was operationalized through 3-, 9-, and 30-hotel room choice sets. Through experimental design, this study shows that the presence of an information filtering mechanism reduces consumers’ perceptions of choice overload with a large number of choices (30 choices), whereas its impact is attenuated with smaller choice sets (3 and 9 choices). In addition, choice overload mediates the impact of choice set size on decision confidence. Theoretical contribution and managerial implications are also discussed.     

An investigation of multiple devices and information sources used in the hotel booking process

With the growing ownership of multiple technology devices, and the contribution of mobile travel bookings to the overall travel market, it is critical to investigate the hotel searching and booking process for different device users. This research investigates four categories of device users via a survey with 383 respondents, in the context of search behaviour and information sources used. The results reveal that search engines and family and friends are the most frequently used information sources while the personal computer (PC) is the most used device for both searching and booking. However, there is a significant difference in how these device users engage with information sources, specifically online travel agents (OTAs) and search engines. Furthermore, device users favour one device and are unlikely to switch devices during the search process.     

Reducing perceived health risk to attract hotel customers in the COVID-19 pandemic era: Focused on technology innovation for social distancing and cleanliness

As an essential risk-reduction strategy, technology innovation is likely to play a key role in the hotel industry’s recovery from the 2020 coronavirus pandemic. However, its impact on customer decision-making behavior is unknown. Focusing on technology innovation for reducing guest interaction with employees and enhancing cleanliness, the purpose of this research was to examine the impact of expected interaction and expected cleanliness on perceived health risk and hotel booking intention. Three experimental studies were conducted using online consumer samples. The studies found that low levels of expected interaction through technology-mediated systems lead to low levels of perceived health risk. Perceived health risk mediates the relationship between expected interaction and hotel booking intention. In addition, high levels of expected cleanliness through advanced cleaning technologies moderate the impacts of expected interaction on perceived health risk. Importantly, the proposed perceived risk mechanism was effective in post-pandemic scenarios. Theoretical and practical implications are discussed.     

Consumer reviews and the creation of booking transaction value: Lessons from the hotel industry

In recent years, much has been said about online consumer-generated feedback. Concern typically emerges regarding consumer decision-making as well as the preservation of an organization's image. Additionally, a company's financial performance can be affected by customer online ratings. The present study explores the impact of a hotel's rating and number of reviews on the value generated through online transactions. Through collaboration with consulting company Travel Click, the research team gathered a sample of 178 hotels representing various companies and brands within the United States. Research results demonstrate that TripAdvisor ratings as well as the number of reviews had positive relationship with the average size of each online booking transaction. The paper concludes with theoretical and practical implications.     

Compliance with eWOM: The influence of hotel reviews on booking intention from the perspective of consumer conformity

This study conducted two experiments to determine the influence of review valence, review quantity, and the interaction effects between the two among consumers designated as conformist and non-conformist.⁴ The results show that positive reviews are more effective than negative reviews in enhancing booking intentions and increasing the number of reviews can magnify the influence of review valence on booking intentions. Our analysis of valence indicated that reading positive reviews can have a stronger effect on booking intentions among individuals who are strongly inclined toward conformity. In addition, a greater number of reviews proved to be more persuasive among individuals displaying a low degree of conformity. Finally, the interaction effects among the three independent variables revealed that a larger number of negative reviews can be more damaging to the booking intentions of conformist individuals. In contrast, a larger number of positive reviews were shown to have a greater impact on non-conformists.     

The signaling effect of management response in engaging customers: A study of the hotel industry

Hotels today actively respond to online reviews given their tremendous influence on travelers' decisions. Yet, the questions of how to respond to online reviews continue to baffle hotel managers. By focusing on prospective travelers, we propose the effective management response signals hotels' care for customers and quality of service. Particularly, we postulate the frequency, speed and length of response influence the effectiveness of signaling in reducing information asymmetry. Based on the large-scale field data from TripAdvisor, this study demonstrates that the frequency and speed of response significantly enhance travelers’ engagement as indicated by more reviews, higher average valence, more votes for helpfulness, and higher popularity ranking. Furthermore, the frequent and speedy response is more effective for budget (vs. premium) hotels. Thus, management response to online reviews serves as a critical channel of communication to engage customers.     

The application of regression and correlation techniques for cost planning and control decisions in the hotel industry

A critical factor that contributes to the effectiveness of routine managerial decisions is an understanding of how costs behave under different conditi research study into departmental cost behaviour carried out using statistical cost analysis techniques in a 300-room hotel. The methodology employed for the collection and analysis of the hotel operating cost data over a three-year period is outlined. This is followed by a discussion of the interpretation and evaluation of abridged results in terms of technical and practical applications.     

How the COVID-19 pandemic affected hotel Employee stress: Employee perceptions of occupational stressors and their consequences

This study sought to examine the impacts of the global coronavirus pandemic on hotel employees’ perceptions of occupational stressors and their consequences. Paired t-tests and structural equation modeling were applied to examine the responses of 758 hotel employees in the United States. The findings showed that occupational stressors after the outbreak of the pandemic consisted of three domains: traditional hotel-work stressors, unstable and more demanding hotel-work-environment stressors, and unethical hotel-labor-practices-borne stressors. The impacts of these stressors differed from the hypothesis that traditional hotel-work stressors positively affect job satisfaction and organizational commitment. The findings showed that job satisfaction and organizational commitment significantly explained job performance, subjective well-being, and prosocial behavior, but they did not significantly influence turnover intention. Hotel employees’ pre-pandemic perceptions of occupational stressors and their consequences also differed significantly from their perceptions after the pandemic had broken out.     

The impact of information technology on hotel operations,service management and transaction costs: A conceptual framework for full-service hotel firms

This paper develops a conceptual framework that describes the impact of information technology (IT) on service management and transaction costs in full service hotel firms. It details how IT would help such firms to lower operations-related transaction costs. Further, the underpinnings of how IT would impact service management in full service hotel firms is discussed more specifically from a customer satisfaction point of view while focusing on two aspects, i.e. managing customer delight and the customer's role as a co-producer. Propositions are developed and a discussion on the impact of IT on firm profitability from a transaction cost perspective ensues while concluding with managerial implications.     

The implications of hotel employee attitudes for the development of quality tourism: the case of Cyprus

In an increasingly competitive market, the issue of quality has grown in significance for tourism businesses and destinations alike. This has been influenced by a number of factors, such as the expansion of consumer rights and the alleged emergence ‘new’, quality conscious tourists. In particular, it is the need to retain or increase competitive advantage that has underpinned the drive for quality in tourism—certainly, many destinations, especially those operating in the highly competitive summer-sun market, are now adopting quality tourism development strategies. However, little or no attention has been paid to the role of tourism industry employees, particularly those in hotels, in the success of quality management programmes. The purpose of this paper is to address this omission. Based upon a survey of hotel employees in Cyprus, it identifies a number of factors that may support or limit the drive towards quality service provision, with a variety of implications for the destination as a whole as well as individual hotels. In particular, hotel management should implement strategies based on reward systems, empowerment and reducing staff turnover, whilst there is an important co-ordination and guidance role to be played by the national tourism organisation.     

Accommodating the needs of disabled hotel guests: Implications for guests and management

The purpose of this study are two-fold: (1) to identify disabled guests’ perceptions of their hotel experiences, and (2) to identify the feasibility of implementing disabled guests’ suggestions in hotel design and service policies. Interviews were conducted with leaders of national organizations serving disabled persons and hotel executives. The responses from guests with mobility impairments offered the most suggestions and the greatest need for special accommodations. The mobility disability segment echo those from the hearing and visual impairments segments, with all respondents indicating a need for better staff sensitivity training. Easily implemented suggestions were made for hotel managers to consider when attracting and accommodating guests with disabilities. If adopted by the industry, the recommendations will help hotel operators improve the hotel experiences of guests with disabilities.     

Managing Swiss Hospitality: How cultural antecedents of innovation and customer-oriented value systems can influence performance in the hotel industry

Research into innovativeness and customer orientation in the service industry is burgeoning, yet our understanding of the antecedents and consequences of both activities in hospitality management remain unclear. To address this problem we investigate the link between corporate culture, indicators of innovativeness and business performance in the Swiss hotel industry, because the Swiss have a proclivity toward innovation as well as a long established record in hospitality management. Data were generated from 96 businesses in the hotel industry and the results were analysed using structural equation modeling. They suggest that cultural dimensions are positively associated with customer orientation, innovativeness, and company performance. The implications of the findings are discussed along with limitations and future research directions.     

The European hotel: methodology for analysis of financial operations and identification of appropriate business strategy

One of the long established hotel accounting traditions is the use of operating ratios in the control and evaluation of operating efficiency. However useful the operating ratios for control purposes, over-reliance on this single control technique leaves the hotel operator with insufficient insight into the economics of hotel operation. The example given here is a model of a 100-bedroomed European hotel.     

Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors

The purpose of the paper is to investigate the influence of market accessibility on hotel prices and how this influence is moderated by various quality-signaling factors, such as online user ratings, “thumbs up” (recommendation) percentage, hotel class, and chain affiliation. Using a randomized sample of hotels in the Caribbean islands, we employ a three-level mixed-effect linear regression model to investigate the plausible relationship between market accessibility and hotel prices. After controlling for unobserved island-level and hotel-level characteristics, the model indicates that in most periods, low market accessibility (high flight costs) leads to lower hotel prices, and this influence is mitigated by well-established positive reputations as represented by the quality-signaling factors. Our findings imply that hotels should work to increase their reputations to help buffer the impacts of inaccessibility. In an effort to increase market accessibility, one course of action is to reduce airport landing taxes and fees.     

Profit Luenberger and Malmquist-Luenberger indexes for multi-activity decision-making units: The case of the star-rated hotel industry in China

Due to the vigorous economic development of the tourism industry in China, the number of star-rated hotels has rapidly increased. As a result, techniques to evaluate the performances of star-rated hotels have gained in popularity. In this paper, we develop two indexes for dynamic settings: the profit Luenberger and Malmquist-Luenberger indexes. The distinguishing features of our indexes are three-fold. One, we adopt an economic perspective by considering that hotels are profit maximizers. Two, we model hotels as multi-activity decision-making units by considering that they provide multiple services. Three, our indexes are nonparametric, and work when prices are partially observed. We apply our technique to 30 provinces during 2005–2015. We find that star-rated hotels present better performances over time, but not for every activity. Next, we highlight particular patterns for the provinces. These results are useful for managers to better target their investments, and also for policy makers.