Impact of average daily rate on hotel’s newest atmosphere

Abstract

PurposeThis study aims to create actionable guidelines for pricing decision-making by employing game a theory matrix to forecast the correlation between the average daily rate and the latest ambiance of hotels.Design/methodology/approachUtilizing a vector error correction model, the research employs game theory to assess the influence of the average daily rate on the hotel's newest atmosphere during both peak season (April–September) and valley season (October–March).FindingsFindings indicate that during the peak season, when the average daily rate rises in resorts and falls in suburban areas, the hotel’s newest atmosphere is at its best in both types of accommodations. During the off-peak season, the hotel’s newest atmosphere is achieved when both resorts and suburban accommodations increase their average daily rates.Research limitations/implicationsThere are two study constraints. One is the assumption that hotel guests in both parties prefer not to change hotels, but in fact they would. Two is a limited sample of two resort and suburban markets.Practical implicationsThis suggests that the hotel’s newest atmosphere can draw both leisure and business travelers to suburban areas during the low season and more leisure travelers to resorts during the high season.Social implicationsThe study’s findings have implications for revenue related to the hotel’s newest atmosphere and cleanliness for both suburban and resort hotels, particularly when promoting tourism collaboratively.Originality/valueThe study provides valuable insights for hotel managers in analyzing pricing strategies using matrices.