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

Yammer: A Social Networking Site Exclusively for the Workplace

Effective internal communications among employees are related to some desirable organizational outcomes, such as robust morale, a clear vision, low turnover, and high employee engagement. The question is what platform can serve the purpose. This ABC News video introduces “ Yammer ,” an exclusive internal communication tool for companies. A user must use a valid company e-mail address to sign up for an account. Once an account is validated, the user will be led to the company page that is pretty much like a Facebook page. The difference is that only the users whose e-mail addresses share the same domain can see the wall and communicate with each other. I have no question about whether Yammer could be a useful internal communication tool for companies, but I just wonder: how many social networking sites do people need for communication? Why people have to “create” so many platforms or channels for “effective communications”? To many people, Facebook is only for “friends,” whe

Can leisure and work-from-home demand stimulate extended-stay hotel growth beyond COVID-19?

The lodging industry is   struggling   to fill the empty rooms in 2020. For months, U.S. hotels are running at an occupancy of 50% or lower.     Not every segment   suffers the same impact from the pandemic, however. Demand for   home-sharing  facilities had already bounced back over the summer. Airbnb reported a higher booking than last year. Marriott’s home-sharing arm is also doing well, seeing a sevenfold increase in booking over last summer.     Similar to what a residential rental or home-sharing facility   offers , guestrooms in extended-stay hotels also feature a full-size kitchen or a kitchenette. Extended-stay hotels are designed for travelers who want to stay at a “home” when away from home. A guestroom at the Residence Inn Miami Sunny Isles Beach   Extended-stay hotels vs. home-sharing facilities     Because COVID-19 is primarily transmitted through direct or indirect human contacts, people are highly encouraged to avoid unnecessary human interactions, leading to more   con

Will restaurants of the future still need a dining room?

It does not seem the coronavirus is leaving us soon, although we have seen good   progress in developing the vaccine . In recent weeks, many places reported   a surge of new infected COVID-19 cases . Some even resumed   lockdowns   and the mask-mandate order, forcing restaurants to   shut down indoor dining   services again.     As a short-term remedy, restaurants immediately shifted their offering to   curbside pickup and delivery  services. Meanwhile, restaurants are testing new concepts to embrace the   contactless self-service  trend for the future. Here are some examples,     Chipotle opened its first digital-only restaurant     The new prototype, known as the   Chipotle Digital Kitchen , debut in Highland Falls, NY, earlier this month. Different from the traditional Chipotle restaurant, the Chipotle Digital Kitchen features:     A lobby designated for pickup services through off-premise orders.   A see-through kitchen, allowing customers to see, smell, and hear what is going on b