The Differentiated Pricing Strategy or Hotel under Dual-Channel Reservation Forms

Abstract

The modern information network environment largely changed consumer habits. Hotel Reservation way becomes increasingly diversified. By building the traditional and Internet booking ways' demand functions which were linear in self-and cross-price effects and the hotel revenue function, we determine the optimal pricing strategy of the hotel's Internet booking way. The effect of the optimal strategy is also discussed, and numerical simulation verifies that the optimal strategy can greatly improve the hotel revenue. All of the research propositions help hotel managers make deeper understanding of fixed room quantity's influence on pricing strategies, and provide managers the basis of pricing strategy.

Data driven pricing strategies for hotels during COVID-19 pandemic

“…DFP strategy has been one of the sort after strategies in hotel industries for maximising the revenue and increasing CST since the past several years. Xu et al (2014) have developed a mathematical model for the relationship between DFP strategy and HTR and established a positive relationship between these two variables. Abrate et al (2012) conducted a survey in 1000 European hotels and based on the hotel booking data collected from three months to a single day found that DFP is an effective means to enhance the HTR.…”

“…GOP per available rooms is basically a performance indicator in a hotel and is given by gross revenue minus the gross expenditure and it is a good performance indicator for the hotel and it can form the basis for pricing (Kapiki et al, 2014). DFP as a concept is selling the same product or service at different price for different customers based on customer type, time of purchase, location, etc., (Xu et al, 2014). PBP is to place the product or service at a certain position relative to that of the competitors' product or service with an intention to reach the targeted customers (Smerichevskyi et al, 2019).…”

Measuring Hotel Channel Mix: A DEA-BSC Model

“…According to Xu, Zhao, and Xu (2014), the Internet has changed the way people live and purchase goods and services in profound ways. This phenomenon has been especially true for the hotel industry.…”

Identifying the Optimal Combination of Hotel Room Distribution Channels: A DEA Analysis with a Balanced Scorecard Approach

“…Measuring how effective each channel is at driving demand is central to assuring overall performance. Xu, et al (2014) found that with changes in ecommerce, traditional booking has changed from offline to a combination of online and offline.…”