A Study Of Tourism Hotel Pricing Strategy Based On Demand Elasticity

This paper studies the pricing strategy of tourist hotel based on the price elasticity of demand,taking R Hotal as an example.This paper analyzes the operation condition of R Hotel,the overall market demand and its competitive environment.And we organize its current pricing strategy,and analyzes its problems.Then,we collecte the room sales data of Risong Kampo Hotel and Ramada Encore since the opening,and constructe a logarithmic linear model to estimate the price elasticity of demand for different customers,different room types and different time periods,and make recommendations for the pricing strategies of the two hotels.Meanwhile,this paper also establishes a linear programming model to determine the optimal pricing.The conclusions of the study are as follows:First,the operating conditions of R Hotel are not growing well.The overall hotel revenue growth rate is lower than the sales volume growth rate,while the sales volume growth rate is lower than the market demand growth rate,resulting in a large number of idle rooms,failing to generate benefits.This shows that the hotel's pricing strategy may have problems and fail to maximize revenue.Second,the current pricing strategy of R Hotel is unreasonable.Firstly,the division of seasons is not realistic.The current identified peak season is not the period with highest occupancy rate,and the identified off-season is not the one with lowest occupancy rate.This paper re-divides the hotel pricing season based on the actual occupancy rate distribution of each hotel.Secondly,the difference between different room types and different customers is insufficient.The price differences between different categories are relatively fixed and lack flexibility.At the same time,pricing adjustments in different years did not bring significant benefits.Third,different customers,different seasons,and different room types have different demand elasticity coefficients,and different price adjustment strategies should be adopted.First of all,compared to the sensitivity of the number of nights sold to the room price,the number of occupants is more sensitive to the per capita price.Secondly,for Risong Kampo Hotel,the price increase strategy should be adopted for most room types,seasons and customers,while for Ramada Encore,the price adjustment strategies for different room types,seasons and customers are quite different.The adjustment directions for room price and per capita prices are also different.Thirdly,the price difference between individual guests and groups of different room types should be determined flexibly,and the hotel should optimize the allocation of the room number between different room types.The research in this paper enriches the empirical research of hotel pricing,fills the research gap in related fields,and has theoretical value.Meanwhile,the research conclusions of this paper can provide a useful reference for R Hotel to revise its pricing strategy and improve its income level.It can also provide a reference for other hotels to adjust their pricing strategies based on demand elasticity.It has strong practical significance.The research also has certain limitations.When establishing a logarithmic linear demand function to measure demand price elasticity,it does not completely remove all factors affecting room demand,such as changes in hotel sales channels and sales strategies,and different hotel account managers' vicious competition,etc.However,this paper controls the time variable in the model,excluding the influence of some factors that change with time,and the result is reasonable.