Title: Maximising hotel profits with pricing and room allocation strategies

Authors: Xun Xu; Yibai Li

Addresses: Department of Management, Operations, and Marketing, College of Business Administration, California State University, Stanislaus, One University Circle, Turlock, CA, 95382, USA ' Operations and Information Management Department, Kania School of Management, University of Scranton, 800 Linden St, Scranton, PA, 18510, USA

Abstract: Hotels play an important role in the tourism supply chain by supplying essential accommodations. In today's dynamic and highly competitive market, a hotel's sales strategy significantly influences its profit. This study uses a theoretical modelling approach to help hotel owners make an optimal joint decision of pricing and room allocation strategy to maximise profits when facing new phenomena in the e-tourism era including various distribution channels, promotion programs, and contracts with travel agents. Our study provides optimal solutions for each scenario and discusses the influential factors. Managerial implications are provided.

Keywords: hotel; pricing; room allocation; profit maximisation.

DOI: 10.1504/IJSOM.2017.085904

International Journal of Services and Operations Management, 2017 Vol.28 No.1, pp.46 - 63

Received: 12 Dec 2015
Accepted: 05 Feb 2016
Published online: 18 Aug 2017 *

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