Report challenges execs to rethink hotel discount strategies

A new report published by The Center for Hospitality Research at Cornell is challenging executives to rethink their hotel discounting strategies. The study, which used data drawn from over 6,000 hotels for the period of 2001 through 2003, found that discounting relative to the competitive set does, in fact, raise occupancy, but hotels in direct competition experience higher revenues when they maintain their price structure and do not discount to fill rooms.

 

"These results suggest a preferred pricing strategy of holding rates constant when competitors are discounting, or even raising prices to a small degree," argues Cathy A. Enz the Lewis G. Schaeneman Professor of Innovation & Dynamic Management at Cornell University.