Competitive Hotel Pricing in Europe: An Exploration of Strategic Positioning

This is the most important article I’ve analyzed so far and I strongly recommend it to read it. Based on 4,000 hotels in Europe and 10 year period, the authors proved that hotels achieved higher RevPar when they positioned their ADR higher that their direct competitors. Moreover, the consistent relative pricing over time didn’t affect the RevPar what means that variable pricing which is the core principle of nowadays Revenue Management is questionable.

 

Cathy Enz, Linda Canina, Jean-Pierre van der rest

The Center of Hospitality Research. Cornell University.

source: here

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Application of Customer Value Management in hotel industry

Customers play an important role in most of the businesses. Satisfying their needs is the key to achieve success in nowadays competitive business environment and it was enough to build long lasting relationship with customers. However, XXI century and therefore wide access to information changed the way customers perceive their obligations toward firms. It is said that in most of the branches customer loyalty doesn’t exist. This is only partially true as loyalty exists but it is not as easily achieved as it was before. Retaining customers require a lot of effort and investment. Therefore, the challenge that companies has is to assess whether retaining existing customer will not be more expensive than actually finding a new one. In order to do so, companies needs to analyze the value of different groups of customers and use this knowledge to devise marketing strategy. Such a process is usually called Customer Value Management.

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