Pricing strategies for perishable products: the case of Vienna and the hotel reservation system hrs.com

Consider a retailer who sells perishable products for which there is uncertain demand. Yield management with dynamic pricing is a standard practice that firms use for revenue management. For perishable products, recent analysis has focused on the distribution of flight capacity, referred to as ticket sales. Other non- storable, non-transportable, immaterial hospitality products include hotel capacity. The article discusses the extent to which hotel pricing strategies vary within the internet distribution system hrs.com. This study focuses on the distribution of hotel rooms available for booking on the internet for Vienna and gives an outlook to Euroland capitals. The main research interests are the underlying pricing models and the setting of the end price. Data was taken from hrs.com, which is the most important specialist for hotel room internet distribution in Germany according to recent studies by KMPG and others. The results include the identification of different pricing strategy clusters with regard to hotel category and hotel availability over a 22-day period for Vienna and one city from all Euroland countries (the capitals were studied for all cases except for the Netherlands, for which data was collected for Amsterdam). The study took the arrival days Mondays, Tuesdays, Wednesdays and Thursdays into account, and used data for all these days from the 11th of July, 2005, to the 10th of October, 2005, for Vienna, and the first and the last of these dates as a comparison base for the other Euroland cities.