Title: Optimal pricing strategy of hotel for long-term stay

Authors: Liuyi Ling; Xiaolong Guo; Lina He

Addresses: School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei, Anhui, China. ' School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei, Anhui, China. ' School of Management, University of Science and Technology of China, 96 Jinzhai Road, Hefei, Anhui Province, 230026

Abstract: Along with the economic development and tourism prosperity, long-term stay in hotels is very common in realistic practice in recent years. This paper does some research on hotel pricing for long-term stay. By developing an operational optimisation model, this paper derives the optimal pricing strategy for long-term stay, and demonstrates that this strategy is beneficial to hotel as well as its customers. Moreover, this paper further analyses the effects on the optimal room rate and hotel revenue, of standard room rate, variable cost, hotel capacity, the number of individual customers, as well as the properties of long-term stay. Eventually, a numerical experiment is employed, and the results are consistent with reality.

Keywords: service management; long term stays; hotel pricing; optimal strategy; Poisson distribution; pricing strategy; room rate; hotel revenue; standard room rate; variable cost; hotel capacity.

DOI: 10.1504/IJSTM.2012.048024

International Journal of Services Technology and Management, 2012 Vol.17 No.1, pp.72 - 86

Available online: 17 Jul 2012 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article