IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v27y2021i2p328-345.html
   My bibliography  Save this article

Digital transformation and revenue management: Evidence from the hotel industry

Author

Listed:
  • Ziad Alrawadieh

    (54658University of Jordan, Jordan)

  • Zaid Alrawadieh

    (37516Istanbul University Cerrahpasa, Turkey)

  • Gurel Cetin

    (37516Istanbul University, Turkey)

Abstract

To maximize their revenues and protect their market share against traditional competitors (e.g. formal lodging businesses) and disruptive business models (e.g. Airbnb), the lodging industry increasingly relies on technology in various operations. However, the extent to which hotels adopt technology innovation in their revenue management (RM) operations, as well as the benefits of and barriers for digitalization, remains unclear. Moreover, the possible impacts of digital transformation on the future of revenue managers’ professions have been largely overlooked in previous studies. Drawing on qualitative data collected through 23 semistructured interviews with revenue managers in luxury and upscale hotels across Jordan, the findings suggest that RM is going through digital transformation with different levels of sophistication. While acknowledging the benefits of digital transformation in saving time, supporting the decision-making process, and yielding more revenues, the high cost of RM software emerges as a key barrier for digital transformation. The findings also reveal that the automation of various manual heuristics in RM is far from being possible, and therefore, digital transformation is unlikely to pose a threat to the future of the RM profession.

Suggested Citation

  • Ziad Alrawadieh & Zaid Alrawadieh & Gurel Cetin, 2021. "Digital transformation and revenue management: Evidence from the hotel industry," Tourism Economics, , vol. 27(2), pages 328-345, March.
    • Handle: RePEc:sae:toueco:v:27:y:2021:i:2:p:328-345
    DOI: 10.1177/1354816620901928
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1354816620901928
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1354816620901928?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Reinartz, Werner & Wiegand, Nico & Imschloss, Monika, 2019. "The impact of digital transformation on the retailing value chain," International Journal of Research in Marketing, Elsevier, vol. 36(3), pages 350-366.
    2. Sharon Hormby & Julia Morrison & Prashant Dave & Michele Meyers & Tim Tenca, 2010. "Marriott International Increases Revenue by Implementing a Group Pricing Optimizer," Interfaces, INFORMS, vol. 40(1), pages 47-57, February.
    3. Dax Cross, 2016. "A history of revenue management and the advent of next-generation RM," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 15(3), pages 293-298, July.
    4. Matt, C. & Hess, Thomas & Benlian, Alexander, 2015. "Digital Transformation Strategies," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 75002, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Ivanov Stanislav, 2019. "Ultimate transformation: How will automation technologies disrupt the travel, tourism and hospitality industries?," Zeitschrift für Tourismuswissenschaft, De Gruyter, vol. 11(1), pages 25-43, April.
    6. Álvaro Matias & Peter Nijkamp & Manuela Sarmento (ed.), 2013. "Quantitative Methods in Tourism Economics," Springer Books, Springer, edition 127, number 978-3-7908-2879-5, December.
    7. Tevfik Demirciftci & Gurel Cetin & Anil Bilgihan, 2017. "Coping with RM challenges in hospitality education," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(5), pages 499-512, October.
    8. Matt, C. & Hess, Thomas & Benlian, Alexander, 2015. "Digital Transformation Strategies," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 75202, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    9. Christian Matt & Thomas Hess & Alexander Benlian, 2015. "Digital Transformation Strategies," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 57(5), pages 339-343, October.
    10. Sheryl E Kimes, 2016. "The evolution of hotel revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 15(3), pages 247-251, July.
    11. Guadix, José & Cortés, Pablo & Onieva, Luis & Muñuzuri, Jesús, 2010. "Technology revenue management system for customer groups in hotels," Journal of Business Research, Elsevier, vol. 63(5), pages 519-527, May.
    12. Mehmet Altin, 2017. "A taxonomy of hotel revenue management implementation strategies," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(3), pages 246-264, June.
    13. Aydin, N. & Birbil, S.I., 2018. "Decomposition methods for dynamic room allocation in hotel revenue management," European Journal of Operational Research, Elsevier, vol. 271(1), pages 179-192.
    14. Zach, Florian J. & Nicolau, Juan L. & Sharma, Abhinav, 2020. "Disruptive innovation, innovation adoption and incumbent market value: The case of Airbnb," Annals of Tourism Research, Elsevier, vol. 80(C).
    15. Klein, Robert & Koch, Sebastian & Steinhardt, Claudius & Strauss, Arne K., 2020. "A review of revenue management: Recent generalizations and advances in industry applications," European Journal of Operational Research, Elsevier, vol. 284(2), pages 397-412.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Natalie Haynes & David Egan, 2024. "Transient price setting in the era of automated systems: the ‘hands-on’ hotel general manager lives on!," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(1), pages 28-38, February.
    3. Antonio Farías & Christian A. Cancino, 2021. "Digital Transformation in the Chilean Lodging Sector: Opportunities for Sustainable Businesses," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    4. Alderighi, Marco & Nava, Consuelo R. & Calabrese, Matteo & Christille, Jean-Marc & Salvemini, Chiara B., 2022. "Consumer perception of price fairness and dynamic pricing: Evidence from Booking.com," Journal of Business Research, Elsevier, vol. 145(C), pages 769-783.
    5. Armindo Frias & Erza Raskova & Álvaro Costa & João Cabral, 2021. "Obtaining Data Values from Tourist Preferences," Sustainability, MDPI, vol. 13(18), pages 1-15, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ponzoa, José M. & Gómez, Andrés & Mas, José M., 2023. "EU27 and USA institutions in the digital ecosystem: Proposal for a digital presence measurement index," Journal of Business Research, Elsevier, vol. 154(C).
    2. Siachou, Evangelia & Vrontis, Demetris & Trichina, Eleni, 2021. "Can traditional organizations be digitally transformed by themselves? The moderating role of absorptive capacity and strategic interdependence," Journal of Business Research, Elsevier, vol. 124(C), pages 408-421.
    3. Xiurui Xu & Guangming Hou & Junpeng Wang, 2022. "Research on Digital Transformation Based on Complex Systems: Visualization of Knowledge Maps and Construction of a Theoretical Framework," Sustainability, MDPI, vol. 14(5), pages 1-19, February.
    4. Pablo Martínez de Miguel & Carmen De-Pablos-Heredero & Jose Luis Montes & Antón García, 2022. "Impact of Dynamic Capabilities on Customer Satisfaction through Digital Transformation in the Automotive Sector," Sustainability, MDPI, vol. 14(8), pages 1-19, April.
    5. Swen Nadkarni & Reinhard Prügl, 2021. "Digital transformation: a review, synthesis and opportunities for future research," Management Review Quarterly, Springer, vol. 71(2), pages 233-341, April.
    6. Caroline Jennings Saul & Heiko Gebauer, 2018. "Digital Transformation as an Enabler for Advanced Services in the Sanitation Sector," Sustainability, MDPI, vol. 10(3), pages 1-18, March.
    7. Isaiah Olurinola & Romanus Osabohien & Bosede Ngozi Adeleye & Ifeoluwa Ogunrinola & Jacob Isaac Omosimua & Tyrone De Alwis, 2021. "Digitalization and Innovation in Nigerian Firms," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(3), pages 263-277, March.
    8. Irene Bertschek & Joern Block & Alexander S. Kritikos & Caroline Stiel, 2024. "German financial state aid during Covid-19 pandemic: Higher impact among digitalized self-employed," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 36(1-2), pages 76-97, January.
    9. Marcus Grieger & André Ludwig, 2019. "On the move towards customer-centric business models in the automotive industry - a conceptual reference framework of shared automotive service systems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 29(3), pages 473-500, September.
    10. Ander, Veronika & Cihelka, Petr & Tyrychtr, Jan & Novák, David, 2022. "Towards Compromise User Experience Design in Ambient Intelligent Environment," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(2), June.
    11. Zahoor, Nadia & Zopiatis, Anastasios & Adomako, Samuel & Lamprinakos, Grigorios, 2023. "The micro-foundations of digitally transforming SMEs: How digital literacy and technology interact with managerial attributes," Journal of Business Research, Elsevier, vol. 159(C).
    12. Antonio Farías & Christian A. Cancino, 2021. "Digital Transformation in the Chilean Lodging Sector: Opportunities for Sustainable Businesses," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    13. Karekla Maria & Pollalis Yannis & Angelopoulos Michail, 2021. "Key Drivers of Digital Transformation in Greek Businesses: Strategy vs. Technology," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 29(2), pages 33-62, June.
    14. Coskun-Setirek, Abide & Tanrikulu, Zuhal, 2021. "Digital innovations-driven business model regeneration: A process model," Technology in Society, Elsevier, vol. 64(C).
    15. Paul John, Pena, 2019. "An ASEAN Digital Single Market: Boosting the Aspiration for a Single Market in the Digital Era," MPRA Paper 95948, University Library of Munich, Germany.
    16. Del Vecchio, Pasquale & Secundo, Giustina & Garzoni, Antonello, 2023. "Phygital technologies and environments for breakthrough innovation in customers' and citizens' journey. A critical literature review and future agenda," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    17. Misheck Musaigwa & Stephen Mutula, 2022. "Impact of digital transformation on strategy in the insurance sector," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(4), pages 69-76, June.
    18. Sascha Kraus & Paul Jones & Norbert Kailer & Alexandra Weinmann & Nuria Chaparro-Banegas & Norat Roig-Tierno, 2021. "Digital Transformation: An Overview of the Current State of the Art of Research," SAGE Open, , vol. 11(3), pages 21582440211, September.
    19. Marija Jović & Edvard Tijan & Doroteja Vidmar & Andreja Pucihar, 2022. "Factors of Digital Transformation in the Maritime Transport Sector," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    20. Robinson, Tenesha Y. & Smith-Jackson, Tonya, 2023. "Breaking barriers through the digital workforce: Providing IT training and employment pipelines for ex-offenders," Technological Forecasting and Social Change, Elsevier, vol. 190(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:27:y:2021:i:2:p:328-345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.