On revenue management and last minute booking dynamics

Chih‐Chien Chen · Zvi Schwartz

48 citations0/0 files storedInternational Journal of Contemporary Hospitality Management

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Supply Chain and Inventory Management Diverse Aspects of Tourism Research Consumer Market Behavior and Pricing

Abstract

Purpose This study aims to explore booking behavior in an online experiment where the time before the date of stay was controlled for and where action and perceptions were recorded. Design/methodology/approach An initial pool of 302 students enrolled in various undergraduate and graduate courses in a Midwestern university were asked to participate in the study. Participants were assigned randomly to one of five groups. The treatments differed in the number of days participants had to complete the task of booking a room. Findings The findings suggest that a sharp increase in the participants' propensity to book occurs during the last week before the date of stay. In addition, the results of the binomial logistic regression provide strong support for the notion that time and the two assessed perceptions are strongly associated with the booking decisions of last minute deal seekers. Participants were more likely to book the closer it was to the date of stay if they thought the hotel was likely to sell out, and if they expected to be offered a better deal later in the process. Originality/value This study explored the role of time in hotel room booking decisions. Research suggests that two relevant trends are to be reckoned with when it comes to last minute bookings. First, a growing segment of the travel market is taking advantage of technological advances that facilitate effective deal‐seeking behavior. Second, these patterns of deal‐seeking behavior, and the manner in which consumers respond and adapt to revenue management policies in their attempt to book optimally, are not well understood yet. Accordingly, this study aimed to explore several aspects of last minute perceptions and behavior.

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References

2004The Theory and Practice of Revenue Management 2002Experimental research in financial accounting 2002The future eTourism intermediaries 2002Pricing and revenue optimization 2000Optimal Dynamic Pricing for Perishable Assets with Nonhomogeneous Demand 1980Students As Surrogates in Behavioral Accounting Research: Some Evidence 2008Revenue Management's Renaissance 2003The evolution of electronic distribution: Effects on hotels and intermediaries

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