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

Ibrahim Mohammed, Basak Denizci Guillet, Rob Law and Wassiuw Abdul Rahaman
Additional contact information
Ibrahim Mohammed: 162961University of Professional Studies, Ghana
Basak Denizci Guillet: 26680Hong Kong Polytechnic University, China
Rob Law: 26680Hong Kong Polytechnic University, China

Tourism Economics, 2021, vol. 27, issue 2, 346-364

Abstract: 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.

Keywords: Hong Kong; intertemporal price discrimination; price change; price patterns (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:27:y:2021:i:2:p:346-364

DOI: 10.1177/1354816620903900

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