Game theoretic pricing models in hotel revenue management: an equilibrium choice-based conjoint analysis approach

This paper explores a game-theoretically founded approach to conjoint analysis that determines equilibrium room rates under differentiated price competition in an oligopolistic hotel market. Competition between hotels is specified in terms of market share functions that can be estimated using multinomial logit models of consumer choice. The approach is based on choice-based conjoint analysis that permits the estimation of attributes weights (“part-worths”) for an additive utility formulation of the utility function. From this, room rates that equilibrate the market, conditioned on the differences in services and facilities offered by competing hotels, can be determined. The approach is illustrated by an example

Revisiting the relevance of economic theory to hotel revenue management education and practice in the era of Big Data

Abstract This paper explores the role of economics in hospitality education and industry practice, with a particular focus on revenue management, and puts forward an argument for a return to the inclusion of economic theory in UK hospitality education, not seen since the 1990s. Given the increasing amounts of pricing data available to both managers and customers and the consequent market complexities now seen, developing economic literacy is demonstrated to be a crucial skill required for future hospitality graduates, allowing them to make successful revenue decisions and sense-check with confidence the decisions made by automated revenue systems. Economic literacy is defined as a balanced understanding of economic theory that can be applied in real-life business scenarios, extending beyond simple consideration of supply and demand to a mixture of neoclassical and behavioural approaches to economics

Does Willingness to Pay for Rate Conditions Depend on the Booking Window? A Novel Time-Dependent Conjoint Analysis Approach

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