Revenue Management and Length-of-Stay-Based Room Pricing. (November 2017)

• Record Type: Journal Article
• Authors: Riasi, Arash; Schwartz, Zvi; Liu, Xuan; Li, Songzi
• Is Part Of: Cornell hospitality quarterly. Volume 58:Number 4(2017:Nov.)
• Page Start: 393
• Page End: 399
• Publication Date: 2017-11
• Subjects: revenue management -- length of stay -- room pricing -- hotel industry; Hospitality industry -- Periodicals; Hotel management -- Periodicals; Restaurant management -- Periodicals; 338.4791
• DOI: 10.1177/1938965517704372
• Languages: English
• ISSNs: 1938-9655

Abstract

From a theoretical perspective, it is unclear whether hotels should offer a discount to customers who stay for longer periods, while it is rather clear that customers feel entitled to such length-of-stay (LOS)-based discounts. Accordingly, the major theoretical contribution of this study is to provide empirical evidence of hotels' LOS-based pricing practices. The findings revealed that on average, hotels charge more per night when the guests stay longer. The finding that hotels increase their room rates as LOS increases, suggests that hotel revenue managers may want to address the customers' misinformed expectations of getting lower prices for longer LOS and/or devise pricing or communication strategies to deal with it.