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.
BaumTMudambiR (1995) An empirical analysis of oligopolistic hotel pricing: The case of Bermuda Resort Hotels. Annals of Tourism Research22(3): 501–506.
2.
ChenCMChangKL (2012) Effect of price instability on hotel profitability. Tourism Economics18(6): 1351–1360.
3.
ChungK (2000) Hotel room rate pricing strategy for market share in oligopolistic competition – Eight-year longitudinal study of super deluxe hotels in Seoul. Tourism Management21(2): 135–145.
HayesDKHuffmanLM (1995) Value pricing: How low can you go?Cornell Hospitality Quarterly36: 51–56.
6.
NooneBMCaninaLEnzCA (2013) Strategic price positioning for revenue management: The effects of relative price position and fluctuations on performance. Journal of Revenue and Pricing Management12(3): 207–220.
7.
OiWY (1961) The desirability of price instability under perfect competition. Econometrica: 29(1): 58–64.
8.
ShankarVBoltonR (2004) An empirical analysis of determinants of retailer pricing strategy. Marketing Science23(1): 28–49.
9.
STR (2014) STR Companies: About. Available at: www.str.com/about (accessed 24 May 2014).
