The Effect of Price Dispersion on hOtel Performance

Woo Gon Kim, Meehee Cho, Daekwan Kim and Geon-Cheol Shin
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Woo Gon Kim: Dedman School of Hospitality, College of Business, Florida State University, 288 Champions Way, UCB 4116, Tallahassee, FL 32306, USA
Meehee Cho: Dedman School of Hospitality, College of Business, Florida State University, 288 Champions Way, UCB 4100, Tallahassee, FL 32306-2541, USA
Daekwan Kim: Department of Marketing, the College of Business, Florida State University, Rovetta Business Bldg 358, Tallahassee, FL 32306-1110, USA
Geon-Cheol Shin: School of Management, Kyung Hee University, 1 Hoegi-dong, Dongdaemun-gu, Seoul 130-701, Republic of Korea

Tourism Economics, 2014, vol. 20, issue 6, 1159-1179

Abstract: Previous studies have concentrated on comparing price dispersion and price level between offline and online channels. The primary objectives of this study are to (a) investigate the relationships between offline price dispersion and a company's performance, (b) examine the relationships between online price dispersion and a company's performance and (c) investigate the effect of price dispersion between offline and online channels on a company's performance. The findings show that a decrease in online price dispersion has a positive impact on a hotel performance. Therefore, to enhance hotel performance, hotel marketers should manage pricing strategies for multiple online channels; in addition, hotel companies should pursue rate parity policies across different online channels. Conversely, the results show a positive relationship between offline price dispersion and hotel performance. It is suggested that customization and bundling strategies for offline channels enhance the overall profitability of hotels. The findings advance knowledge of consumers' purchasing behaviour and sellers' pricing strategies.

Keywords: hotel pricing; price dispersion; hotel performance; online channel; offline channel (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:20:y:2014:i:6:p:1159-1179

DOI: 10.5367/te.2013.0343

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