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Spatial price competition in the Manhattan hotel market: The role of location, quality, and online reputation

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  • Erfan Rezvani
  • Christian Rojas

Abstract

We investigate whether and to what extent price competition among hotels in Manhattan is driven by geographic location, quality, and online reputation. We investigate (a) which of the three product differentiation dimensions matters most for hotels' pricing decisions and (b) whether and to what extent competition is localized. Results show that hotel quality and geographic location matter the most for price competition. Whereas hotels of similar reputation also react to each other's prices, the effect is less important. Also, results indicate that hotels' prices react most aggressively to prices set by the four nearest hotels in the area.

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  • Erfan Rezvani & Christian Rojas, 2020. "Spatial price competition in the Manhattan hotel market: The role of location, quality, and online reputation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(1), pages 49-63, January.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:1:p:49-63
    DOI: 10.1002/mde.3092
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    Cited by:

    1. Juan Pedro Aznar, 2021. "Differentiation and pricing strategies for hotels in sun and beach destinations," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 289-293, March.
    2. María D. Illescas-Manzano & Sergio Martínez-Puertas & Gema M. Marín-Carrillo & María B. Marín-Carrillo, 2023. "Dynamics of agglomeration and competition in the hotel industry: A geographically weighted regression analysis based on an analytical hierarchy process and geographic information systems (GIS) data," Oeconomia Copernicana, Institute of Economic Research, vol. 14(1), pages 213-252, March.
    3. Erfan Rezvani & Christian Rojas, 2022. "Firm responsiveness to consumers' reviews: The effect on online reputation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(4), pages 898-922, November.
    4. Guo, Shiau-Ling, 2023. "The governance implication of the geographic concentration of franchise activities for franchise relationships," Journal of Business Research, Elsevier, vol. 157(C).

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