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Hotel strategic pricing in Europe: a 10-year exploration of competition

Author

Listed:
  • Cathy A. Enz
  • Linda Canina
  • Jean-Pierre I. Van Der Rest

Abstract

This study explores the effects of competitor pricing levels on relative revenue among over 4000 hotels in Europe over a 10-year period (2004-2013). This sample of European hotels, which included both independent and chain-affiliated properties, achieved higher revenue per available room (RevPAR) than direct competitors when they positioned their hotels with comparatively higher prices. These data revealed that regardless of the economic situation of the time period, hotels that positioned with average daily rates (ADRs) above those of their direct competitors benefited from higher relative RevPAR even though they experienced lower comparative occupancies. This finding was stronger for chain-affiliated vs. independent hotels. Maintaining a consistent relative price over time did not significantly affect revenue performance, controlling for hotel type and location. As is the case with previous, similar studies, the findings argue for a firm, strategic approach to pricing, rather than a reactive or strictly tactical approach.

Suggested Citation

  • Cathy A. Enz & Linda Canina & Jean-Pierre I. Van Der Rest, 2016. "Hotel strategic pricing in Europe: a 10-year exploration of competition," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 9(2/3), pages 92-107.
    • Handle: RePEc:ids:ijrevm:v:9:y:2016:i:2/3:p:92-107
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    Citations

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    Cited by:

    1. Carla Bento & Paulo Almeida & José Luis Jiménez-Caballero, 2022. "The impact of the Web Summit on hotel performance, the case of Lisbon," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(5), pages 564-577, October.
    2. Henri Kuokkanen & Jean-Pierre Van der Rest, 2022. "Game—Gimme a Better Price! A Negotiation Role Play on B2B Pricing in Hotel Revenue Management," INFORMS Transactions on Education, INFORMS, vol. 23(1), pages 46-55, September.
    3. Crespo Catarina & Gomes Conceição & Malheiros Cátia & Santos Luís Lima, 2023. "Determinants and COVID-19 effects on RevPAR: The case of Europe," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 13(1), pages 97-109, December.

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