Game theoretic pricing models in hotel revenue management: An equilibrium choice-based conjoint analysis approach

This paper explores a game-theoretically founded approach to conjoint analysis that determines equilibrium room rates under differentiated price competition in an oligopolistic hotel market. Competition between hotels is specified in terms of market share functions that can be estimated using multinomial logit models of consumer choice. The approach is based on choice-based conjoint analysis that permits the estimation of attributes weights (“part-worths”) for an additive utility formulation of the utility function. From this, room rates that equilibrate the market, conditioned on the differences in services and facilities offered by competing hotels, can be determined. The approach is illustrated by an example.     

Modelling growth and revenue for Swedish hotel establishments

This paper provides first estimates of the determinants of output growth of Swedish hotels based on establishment data. Growth of overnight stays is modelled as a function of initial size, age, type of accommodation, location and hotel prices measured as average revenues per guest nights. The empirical model accounts for potential endogeneity of hotel prices through the two-stage least absolute deviation model (2SLAD) and the instrumental variable quantile regression method. 2SLAD estimates show a positive and significant relationship between hotel prices and subsequent growth. The relationship is nonlinear with a decreasing impact as the price level increases. Growth of establishments is significantly higher for smaller and younger hotels. An important result is that city hotels, in comparison to tourist and other hotels – which are mainly located outside urban areas (in the mountains and at the sea) – exhibit significantly higher growth rates with a gap between 2.2 and 3.4 percentage points. Furthermore, the positive impact of hotel prices on growth is larger for high-growth establishments. Accommodation prices significantly decrease with the number of local competitors with a non-linear form and increase with size. City hotels and accommodation in the capital city have the highest revenues per guest night.     

Responding to the bed bug crisis in social media

The increasing trend in social media changes the landscape of crisis communication and thus, calls for innovation in hotel crisis management practices. This research examined how New York City hotels responded to recent issues surrounding the bed bug crisis on the social media site TripAdviosr. This study adopted a mixed methods research design. The quantitative findings revealed that hotels’ response behaviors were associated with organizational factors (e.g. hotel's popularity, average rating, and star rating) and the rating of online reviews. The qualitative findings indicated that hotels employed various types of strategies in the response, which were dominated by strategies of bolstering and enhancing. In conclusion, this study addressed the need for a proactive approach in hotel crisis management and provided practical implications.     

Hotel attribute performance,eWOM motivations,and media choice

The objectives of this study are to match the motivations for posting about hotel experiences with the online media chosen and to identify the electronic word-of-mouth (eWOM) motivations that are affected by hotel attribute performance. The results show that altruism and platform assistance motivations were positively correlated with consumer opinion sites. Extraversion, social benefits, and dissonance reduction were positively correlated with social network sites. Economic incentives did not improve the likelihood of posting eWOM on consumer opinion sites but reduced the likelihood of posting on social network sites. Finally, hotel attribute performance had a significant effect only on extraversion and dissonance reduction motivations.     

Importance Performance Competitor Analysis (IPCA): A study of hospitality companies

Although Importance Performance Analysis (IPA) is a popularly used method in many research areas, academics mainly criticise it because of its relative structure and lack of consideration of competitors. In the present study, the author proposes an extended version of IPA, which is called Importance Performance Competitor Analysis (IPCA), to address these shortcomings. The proposed method considers the GAP score, which is obtained by the comparison of an attribute’s importance and the focal company’s performance in the same attribute. Moreover, it uses focal and competing companies’ performance differences score. IPCA offers different strategies for each attribute depending on the quadrant that it is positioned in. Absolute structure and consideration of competitors are the advantages of IPCA. Another characteristic of the IPCA is its simplicity, like IPA, there is no necessity to have advanced level statistical knowledge.     

Do online hotel rating schemes influence booking behaviors?

Travelers’ hotel booking behaviors increasingly depend on peers' opinions and online ratings. This study investigates the effects of online hotel ratings on travelers' attitudes toward the hotel and booking intentions, using a 2 × 2 experimental research design. The results suggest that online rating lists are more useful and credible when published by well-known online travel communities (e.g., TripAdvisor). More favorable attitudes toward a hotel and higher booking intentions emerge when the hotel appears in best hotels lists. Finally, for the entries on best hotels lists, better attitudes and higher booking intentions result if the list is published on a well-known online travel community (Tripadvisor), whereas for entries on a worst hotel list, attitudes and booking intentions decrease even further if the list appears on TripAdvisor.     

The managerial flash sales dash: Is there advantage or disadvantage at the finish line?

The central intent of this qualitative inquiry is to investigate the benefits, drawbacks, and performance measures of hotel room inventory distribution via flash sales websites. Key advantages and disadvantages of using such a distribution channel fall within the categories of inventory management, revenue management, brand marketing, customer relationships, and operational challenges. The significance of the study is in providing a comprehensive review of the flash sales phenomenon in the lodging industry that may assist hotel managers with the performance evaluation of this distribution channel. Using grounded theory methodology, a flash sales evaluation framework was developed based on 46 phone interviews with hotel managers from different segments of the American hotel industry.     

A quantile regression analysis of tourism market growth effect on the hotel industry

This study used the quantile regression method to investigate how inbound tourism market growth proxied by the growth rate of total foreign tourist arrivals (GTA) affects the growth rate of sales (GS) and financial performance of hotel firms in Taiwan. The ordinary least squares estimation results of panel regression test revealed that GTA significantly affects GS, but has no significant effect on financial performance (proxied by hotel equity return). However, quantile regression tests revealed new and interesting results. GTA has a significant effect on GS at the different quantiles of GS. In comparison, although hotel equity return was not significantly related to GTA at the median and high quantiles, the effect of GTA on hotel equity return was statistically significant at the low quantiles. These results suggest that the effect of GTA on hotel equity return is asymmetric and state-dependent, conditional on the distributions of hotel equity return. The study further identified that GTA has a significant influence only on equity returns of hotels with a small size.     

Management of the change process in hotel companies: An investigation at unit level

The management of change has become an organisational necessity in the 1990s and will continue to be a major factor in the management of hotel companies in the future. This article investigates and evaluates management of the change process at unit level in hotel firms. The data was gathered through in-depth semi-structured interviews with ten hotel managers in the UK. Lewin's three-stage model was found to be of limited use in practice. A five-stage model of the change process emerges from the research findings. This model reflects a more practical view of the management of change as an on-going, continuous process. Finally, the limitations of the research are discussed and further research areas identified.     

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.