Faculty & Research
Pricing for Revenue Enhancement in Asian and Pacific Region Hotels: A Study of Relative Pricing Strategies
Vol 8 No 3
By: Linda Canina Ph.D. and Cathy A. Enz Ph.D.
Executive Summary: This report explores pricing strategies for competitive hotels in 14 different Asian-Pacific countries. The research is based on comparing average percentage differences in occupancies, average daily rates (ADR), and revenue per available room (RevPAR) among competing high end hotels in local markets using data gathered monthly between 2001 and 2006. The results reveal that hotels that price below their competitive sets have lower RevPARs, but do not gain concomitant occupancy boosts. Hotels that charge a price premium have substantially higher RevPARs than their competitors, but without substantial reductions in occupancy. Overall, occupancies remain stable while revenues go up or down depending on whether a hotel sets rates above or below those of its competitive set. This report presents an extension of two previous Cornell Hospitality Reports which found that U.S. hotels that discount relative to their competitive set have higher occupancy and lower RevPAR. Examining both U.S. and Asian data over the period of 2001 to 2006 showed that higher occupancies do not necessarily accompany the decision to discount prices, as they did for U.S. hotels in 2001 through 2003. The study explores the ASEAN, China, and Australian markets separately and finds similar patterns.
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- Pricing for Revenue Enhancement in Asian and Pacific Region Hotels: A Study of Relative Pricing Strategies By: Linda Canina Ph.D. and Cathy A. Enz Ph.D.
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Comments
Would like to congratulate Cathy Enz and Linda Canina for the very interesting and "eye opening" study on pricing for revenue enhancement in Asian & Pacific Region Hotels.A very well done research and straight to the point. This is probably the first study done by a reputable organization on Hotels in Asia and want to thank you for this initiative.
Giovanni Angelini
Chief Executive Officer/Managing Director
Shangri-La Hotels & Resorts, Hong Kong
Other Reports or Articles You May Find of Interest
- Why Discounting Still Doesn't Work: A Hotel Pricing Update, by Linda Canina, Ph.D. and Cathy A. Enz, Ph.D.
- Low-price Guarantees: How Hotel Companies Can Get It Right, by Steven A. Carvell, Ph.D., and Daniel C. Quan, Ph.D.
- Revenue Management in U.S. Hotels: 2001-2005, by Linda Canina, Ph.D., and Cathy A. Enz, Ph.D.
About Linda Canina Ph.D.
Linda Canina is an Associate Professor of Finance at Cornell University’s School of Hotel Administration. Her research interests include asset valuation, corporate finance and strategic management. She has expertise in the areas of econometrics, valuation, IPO’s, payout policy, mergers and acquisitions, options and the hospitality industry.
About Cathy A. Enz Ph.D.
Dr. Enz' primary research focuses include innovation; best practices and change management; strategic human resource management, including the empowerment of service workers and the development of social partnerships for economic development. She has published over 50 articles in Administrative Science Quarterly, the Academy of Management Review, the Hospitality and Tourism Research Journal, the Cornell Hotel and Restaurant Administration Quarterly, Human Relations, and others. She has also written numerous book chapters and books, including American Lodging Excellence: The Keys to Best Practices in the U.S. Lodging Industry (with L. Dubé, L. Renaghan, and J. Siguaw).
