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

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  • Arenoe, Bjorn
  • van der Rest, Jean-Pierre I.
  • Kattuman, Paul

Abstract

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.

Suggested Citation

  • Arenoe, Bjorn & van der Rest, Jean-Pierre I. & Kattuman, Paul, 2015. "Game theoretic pricing models in hotel revenue management: An equilibrium choice-based conjoint analysis approach," Tourism Management, Elsevier, vol. 51(C), pages 96-102.
    • Handle: RePEc:eee:touman:v:51:y:2015:i:c:p:96-102
    DOI: 10.1016/j.tourman.2015.04.007
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    Cited by:

    1. Nadia El-Nemr & Béatrice Canel-Depitre & Atour Taghipour, 2017. "Determinants Of Hotel Room Rates," Post-Print hal-02332636, HAL.
    2. Ming Yin & Zheng Wan & Kap Hwan Kim & Shi Yuan Zheng, 2019. "An optimal variable pricing model for container line revenue management systems," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 21(2), pages 173-191, June.
    3. Henri Kuokkanen & Frederic Bouchon, 2021. "When team play matters: Building revenue management in tourism destinations," Tourism Economics, , vol. 27(2), pages 379-397, March.
    4. Fatemeh Binesh & Amanda Belarmino & Carola Raab, 2021. "A meta-analysis of hotel revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(5), pages 546-558, October.
    5. Yunmei Bai & Chun-Hung Tang, 2021. "Determining the optimal group rate in the hotel industry," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 446-456, August.
    6. Taiga Saito & Akihiko Takahashi & Noriaki Koide & Yu Ichifuji, 2017. "Optimal Overbooking Strategy in Online Hotel Booking Systems," CIRJE F-Series CIRJE-F-1065, CIRJE, Faculty of Economics, University of Tokyo.
    7. Kemperman, Astrid, 2021. "A review of research into discrete choice experiments in tourism: Launching the Annals of Tourism Research Curated Collection on Discrete Choice Experiments in Tourism," Annals of Tourism Research, Elsevier, vol. 87(C).
    8. Aldric Vives & Marta Jacob & Marga Payeras, 2018. "Revenue management and price optimization techniques in the hotel sector," Tourism Economics, , vol. 24(6), pages 720-752, September.

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