What Revenue-Optimizing Firms Can Do About Their Deal-Seeking Consumers: The Role of Price Patterns, Timing and Cancellation Policies in Travelers' Advanced Booking Decisions
The research is first to empirically explore the impact of consumer behavior dimensions on the effectiveness of revenue management policies. Traditional revenue management algorithms all assume a simplistic consumer. That is, they ignore the growing complexity of consumer deal-seeking behavior; an Internet induced behavioral change that during the past decade has remarkably modified the operating environment for hotel revenue management. The dissertation pioneers empirical methods to identify and measure these impacts using experimental designs. The contribution of the research is both theoretical and practical. Theoretically, my research tests some of the assumptions and predictions of the advanced booking decision model, an analytical framework suggested to describe how deal-seekers make booking decisions, attempting to minimize their costs and maximize their utility in a hotels' revenue management oriented environment. The findings illuminate the need for more theoretical work on the analytical model as not all of the model's assumptions and predictions were supported by the results of the series of experiments conducted as part of the research. In addition, the research identified several revenue management related factors that were ignored in the analytical model, factors that the research shows to have considerable impact on the consumers' propensity to book and their willingness to pay. The outcome of the research has also significant practical importance. The majority of the findings, such as the changes in willingness to book as time nears the date of stay and the impact of cancellation policies and fees have immediate implications for hotel revenue management policies.
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign