Heads in Beds: Strategic Discounting for Hotels

This book provides a customized statistical approach that determines whether or not discounting hotel room rates is actually an effective pricing strategy in the lodging industry. The study assesses the long and short-term relationships between discounting room rates and hotel financial performance when considering the non-stationary conditions of a time series data set. The research is rooted in an operational based perspective with regard to the challenges presented by the perishable nature of room night sales - the loss of which may impact a manager’s fundamental responsibility: to generate maximum revenue from the existing hotel room capacity. The research is at the forefront in its use of the methodological procedures that support a theoretical framework capable of providing explanations regarding managers’ internal process of discounting as an effective pricing strategy that could compensate for times of decreased room demand.