Predicting the direction of dynamic price adjustment in the Hong Kong hotel industry

Bibliographic Data

ID21689359
AuthorsIbrahim Mohammed (0000-0002-9583-7078, University of Professional Studies, Ghana, corresponding author), Basak Denizci Guillet (0000-0001-5883-1729, Hong Kong Polytechnic University, China), Robin Law (0000-0001-7199-3757, Hong Kong Polytechnic University, China), Wassiuw Abdul Rahaman (0000-0003-3241-7604, University of Ghana, Ghana)
Year2021
Volume27
Issue2
Pages346-364
Publication date2021-03-01
Open AccessYes
TypeARTICLE
VenueTourism Economics (JOURNAL)
Journal identifiersISSN: 1354-8166 • E-ISSN: 2044-0375
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/1354816620903900
OpenAlexW3004867133
LanguageEN
Citations received2
References cited54

This study analysed dynamic pricing data of Hong Kong hotels within the last-minute 1-week booking window to determine patterns and direction of room rate changes and their association with hotel characteristics regarding tangible attributes, reputational variables and contextual factors. Findings show that room rates are more likely to increase than decrease or stay constant, and that, holding demand and market conditions constant, the likelihood of price increases (decreases), based on standard binomial probit regression, is positively (negatively) associated with size (tangible attribute), chain affiliation and star rating (reputational attributes), and seller density and location accessibility (contextual factors). These results confirm the importance of differentiation in pricing hotel rooms and indicate how hotel customers and revenue managers can combine these characteristics with predicted demand to anticipate the direction of room rate change in the last-minute booking window as the booking horizon approaches check-in

Advertising · Business · Econometrics · Economics · Geography · Hedonic Pricing · Negative binomial distribution · Probit model · Regression analysis · Revenue · Revenue management · Statistics · Tourism · Computer Science · Consumer Market Behavior and Pricing · Consumer Retail Behavior Studies · Mathematics · Supply Chain and Inventory Management · Marketing

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