Hotel dynamic pricing, stochastic demand and covid-19

Andrea Guizzardi; Luca Vincenzo Ballestra; Enzo D'Innocenzo

doi:10.1016/j.annals.2022.103495

Hotel dynamic pricing, stochastic demand and covid-19

Andrea Guizzardi^*, Luca Vincenzo Ballestra, Enzo D'Innocenzo

^*Corresponding author for this work

Econometrics and Data Science

Research output: Contribution to Journal › Article › Academic › peer-review

101 Downloads (Pure)

Abstract

We develop an innovative framework to study how hoteliers apply inventory control and price discrimination taking into account seasonality. We end up with a time-varying model that, using publicly available information, connects the early booking and last-minute pricing decisions. In doing so, we account for the expected demand size and price elasticity, the inventory put on sales, and the last-minute demand shocks. An analysis focused on 100 hotels in Milan (Italy) shows that during the Covid-19 last-minute discounts/surcharges remain stable over long periods while the role of advance booking as a lever for revenue management is reduced. Moreover, the pandemic has increased the last-minute adjustment at the short advance booking, especially for midweek days.

Original language	English
Article number	103495
Pages (from-to)	1-15
Number of pages	15
Journal	Annals of Tourism Research
Volume	97
Early online date	26 Oct 2022
DOIs	https://doi.org/10.1016/j.annals.2022.103495
Publication status	Published - Nov 2022

Bibliographical note

Publisher Copyright:
© 2022 Elsevier Ltd

Keywords

Intertemporal demand and supply
Inventory control
Last-minute price adjustment
Price kurtosis and asymmetry
Score-driven model
Stochastic seasonality pattern

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1016/j.annals.2022.103495

Hotel dynamic pricing, stochastic demand and covid-19Final published version, 1.32 MBLicence: Article 25fa Dutch Copyright Act

Persistent URL (handle)

Copy link address

Cite this

@article{2aa36229af01438eabc844e2dbe869f8,

title = "Hotel dynamic pricing, stochastic demand and covid-19",

abstract = "We develop an innovative framework to study how hoteliers apply inventory control and price discrimination taking into account seasonality. We end up with a time-varying model that, using publicly available information, connects the early booking and last-minute pricing decisions. In doing so, we account for the expected demand size and price elasticity, the inventory put on sales, and the last-minute demand shocks. An analysis focused on 100 hotels in Milan (Italy) shows that during the Covid-19 last-minute discounts/surcharges remain stable over long periods while the role of advance booking as a lever for revenue management is reduced. Moreover, the pandemic has increased the last-minute adjustment at the short advance booking, especially for midweek days.",

keywords = "Intertemporal demand and supply, Inventory control, Last-minute price adjustment, Price kurtosis and asymmetry, Score-driven model, Stochastic seasonality pattern",

author = "Andrea Guizzardi and Ballestra, {Luca Vincenzo} and Enzo D'Innocenzo",

note = "Publisher Copyright: {\textcopyright} 2022 Elsevier Ltd",

year = "2022",

month = nov,

doi = "10.1016/j.annals.2022.103495",

language = "English",

volume = "97",

pages = "1--15",

journal = "Annals of Tourism Research",

issn = "0160-7383",

publisher = "Elsevier Limited",

}

TY - JOUR

T1 - Hotel dynamic pricing, stochastic demand and covid-19

AU - Guizzardi, Andrea

AU - Ballestra, Luca Vincenzo

AU - D'Innocenzo, Enzo

PY - 2022/11

Y1 - 2022/11

N2 - We develop an innovative framework to study how hoteliers apply inventory control and price discrimination taking into account seasonality. We end up with a time-varying model that, using publicly available information, connects the early booking and last-minute pricing decisions. In doing so, we account for the expected demand size and price elasticity, the inventory put on sales, and the last-minute demand shocks. An analysis focused on 100 hotels in Milan (Italy) shows that during the Covid-19 last-minute discounts/surcharges remain stable over long periods while the role of advance booking as a lever for revenue management is reduced. Moreover, the pandemic has increased the last-minute adjustment at the short advance booking, especially for midweek days.

AB - We develop an innovative framework to study how hoteliers apply inventory control and price discrimination taking into account seasonality. We end up with a time-varying model that, using publicly available information, connects the early booking and last-minute pricing decisions. In doing so, we account for the expected demand size and price elasticity, the inventory put on sales, and the last-minute demand shocks. An analysis focused on 100 hotels in Milan (Italy) shows that during the Covid-19 last-minute discounts/surcharges remain stable over long periods while the role of advance booking as a lever for revenue management is reduced. Moreover, the pandemic has increased the last-minute adjustment at the short advance booking, especially for midweek days.

KW - Intertemporal demand and supply

KW - Inventory control

KW - Last-minute price adjustment

KW - Price kurtosis and asymmetry

KW - Score-driven model

KW - Stochastic seasonality pattern

UR - http://www.scopus.com/inward/record.url?scp=85141238498&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85141238498&partnerID=8YFLogxK

U2 - 10.1016/j.annals.2022.103495

DO - 10.1016/j.annals.2022.103495

M3 - Article

AN - SCOPUS:85141238498

SN - 0160-7383

VL - 97

SP - 1

EP - 15

JO - Annals of Tourism Research

JF - Annals of Tourism Research

M1 - 103495

ER -

Hotel dynamic pricing, stochastic demand and covid-19

Abstract

Bibliographical note

Keywords

UN SDGs

Access to Document

Persistent URL (handle)

Other files and links

Fingerprint

Cite this