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Modeling average daily rate (ADR) volatility index and room price positioning matrix

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  • Yoon Koh

    (University of Houston, USA)

  • Agnes DeFranco

    (University of Houston, USA)

  • Ki-Joon Back

    (University of Houston, USA)

Abstract

Although strategic pricing literature identifies two key dimensions of relative price position and relative price fluctuation, only recently has relative price fluctuation started to gain attention in the hospitality and tourism literature. Given the theoretical and empirical support for considering both dimensions in strategic pricing positioning, this study developed a new index that calculates relative price fluctuation: the ADR volatility index. This new index provides a more complete picture of the pricing positioning of a lodging property. Together with a room price positioning matrix, these two new tools can assist hotels in maximizing their room revenues.

Suggested Citation

  • Yoon Koh & Agnes DeFranco & Ki-Joon Back, 2017. "Modeling average daily rate (ADR) volatility index and room price positioning matrix," Tourism Economics, , vol. 23(7), pages 1476-1483, November.
    • Handle: RePEc:sae:toueco:v:23:y:2017:i:7:p:1476-1483
    DOI: 10.1177/1354816617702051
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    References listed on IDEAS

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    1. Venkatesh Shankar & Ruth N. Bolton, 2004. "An Empirical Analysis of Determinants of Retailer Pricing Strategy," Marketing Science, INFORMS, vol. 23(1), pages 28-49, May.
    2. Chiang-Ming Chen & Kuo-Liang Chang, 2012. "Effect of Price Instability on Hotel Profitability," Tourism Economics, , vol. 18(6), pages 1351-1360, December.
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