Faculty & Research
Hotel Pricing in a Networked World
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Vol 44 No 1
By: Cathy A. Enz Ph.D.
Executive Summary: Exec. Summary: Many hoteliers are using Internet distribution channels without a clear understanding of how networking affects their own organization and influences the pricing of their products and services. Consumers have learned from the industry that they can get a better price by not going directly to the hotel. Hotel demand is price inelastic - this inelasticity means that loss of revenue is strongly related to the price of the room, and that discounting is not offset by increased room sales, even when extreme price reductions are introduced. That is why regaining control of distribution (and pricing) is critical for the hotel industry. If controlling information is a key to using networks successfully, then hotels must set their own policies about what room rates and availabilities they will share with third party distributors.
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- Hotel Pricing in a Networked World By: Cathy A. Enz Ph.D.
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