Skip to main content

Revenue Management: Are Your Guests and Staff Educated?

The January issue of Cornell Hospitality Report discusses the relationships between guests’ familiarity of a hotel’s revenue management practice and guests’ perceived fairness of differential room rates. Taylor and Kimes (2009) collected 815 scenario-based questionnaires in the fall of 2008 and reported the following:

1. Compared to the group who were less familiar with differential pricing policies, those who were more familiar believed the scenarios fairer and less unfair;
2. Respondents who read the leisure scenarios rated fairer and less unfair than those who read the business scenarios;
3. Men, compared to women, and younger respondents, as opposed to older respondents, rated fairer and less unfair.

In addition, frequency of hotel stays is positively relative to perceived fairness and negatively relative to perceived unfairness --- in this case, is “higher frequency” correlated with “more familiar”? There is no statistical difference between perceived fairness or perceived unfairness in terms of brand class (e.g. five-star vs. three-star). In the end, they presented a regression model of return intentions:

Return Index = .785*Fairness Index - .155*Unfairness Index

Based on these research findings, they made the following suggestions to hoteliers:

1. Reveal rate availability and conditions on hotel website, third-party reservation websites, and through the reservation office.
2. Clearly state the conditions associated with promotion rates.
3. Train reservation associates and front office agents on how to respond to the inquiries of differential rates.

Hospitality professionals may need to learn from the airline industry. We all know it is very likely that the person who sits next to us on the same plane pays a different price, but does it bother us much if somebody pays less than we do when we travel?

References:
Taylor, W.J., & Kimes, S.E. (January 2010). How hotel guests perceive the fairness of differential room pricing. Cornell Hospitality Report, 10(2).
Cartoon was copied from http://www.cartoonstock.com/

Comments

Popular posts from this blog

United Airlines pushes economy-class travelers away with a new frequent flyer program

United Airlines just revealed massive changes to its MileagePlus Program. How much a traveler spends on the tickets is the only thing that matters in the airline’s new frequent flyer program.

Not long ago, United quietly switched from a distance-based reward program to a fare-based frequent flyer program. Since 2015, people earn mileages based on how much they spend on the air tickets instead of how far they fly. 

For example, I typically earn about 4,000 reward miles for a round-trip ticket between Los Angeles and Asia, even though the distance of the trip usually ranges from 10,000 to 12,000 miles. Nevertheless, the distance I fly still matters because it will be counted towards the “qualified miles” for elite status. 

Now, the airline wants to take a big step further to (only) reward those top-spending travelers as their elite customers.

The terms used in the current MileagePlus Program

There are four elite statuses in the United Airlines MileagePlus Program, including Premier Silver, …

Promoting student success in the STR Student Market Study Competition

I was in New York City (NYC) over the Veterans Day weekend for the HX: The Hotel Experience 2019, one of the most important trade shows in the lodging industry. Similar to last year’s trade show, the HX 2019 also entailed four components, including HX: The Marketplace, HX: The Conference, Boutique Design New York, and the STR (Smith Travel Research) Student Market Study Competition.  

STR is the leading data analytics provider for the lodging industry. Since its debut in 2015, the STR Student Market Study Competition (the STR Competition hereafter) has received significant attention from the hospitality programs around the world.

This year, over 20 students from the Collins College of Hospitality Management at Cal Poly Pomona traveled to NYC for HX 2019. Moreover, six of them also participated in the STR Competition for the first time.

In the end, the Cal Poly Pomona team won the 2nd Prize among the 25 competing colleges and universities. The other winning teams include Michigan State …

Want a job at McDonald’s? Now, it is as easy as talking to Alexa

McDonald’s Corporation introduced the world’s first voice-initiated job application process called McDonald’s Apply Thru. Now, job seekers can initiate the job application process through McDonald’s Apply Thru by taking to either Alexa or Google Assistant.

How McDonald’s Apply Thru works
The job application process begins with the applicants saying:
Alexa, help me get a job at McDonald’s.” 
or
“Google, help me get a job at McDonald’s.”
Then, the job applicants will need to answer a few basic questions, including their name, job of interest, and the location where they want to work.
Afterward, the job applicants will receive a text message with a hyperlink that will take the applicants to continue the rest of the application process.  
Where McDonald’s Apply Thru serve
McDonald’s Apply Thru is now available in nine countries, including the U.S., U.K., Canada, Australia, France, Germany, Ireland, Italy, and Spain. It will be made available to other countries in the coming months.
Why McDona…