Determining the optimal group rate in the hotel industry

Yunmei Bai () and Chun-Hung Tang ()
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Yunmei Bai: School of Hospitality and Tourism Management, Purdue University
Chun-Hung Tang: School of Hospitality and Tourism Management, Purdue University

Journal of Revenue and Pricing Management, 2021, vol. 20, issue 4, No 7, 446-456

Abstract: Abstract This paper aims to develop an analytical model that prescribes the optimal group rate for hotel group business. Theoretically, this paper fills two gaps in the literature by proposing a model that determines the optimal, not minimum, group rates while considering competing bids. The simulation results show that the optimal group rate is positively affected by the forecasted transient rate and the effect is contingent on the forecasted transient demand. Furthermore, the optimal rate is moderated by group size with respect to both internal (expected transient demand and transient rate) and external (competition) factors respectively.

Keywords: Group rate; Optimal bid price; Competition; Group size (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41272-020-00262-2

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