92 Int. J. Revenue Management, Vol. 9, Nos. 2/3, 2016
Copyright © 2016 Inderscience Enterprises Ltd.
Hotel strategic pricing in Europe: a 10-year
exploration of competition
Cathy A. Enz and Linda Canina
School of Hotel Administration,
Cornell University, Ithaca,
NY 14853-6902, USA
Email: cae4@cornell.edu
Email: lc29@cornell.edu
Jean-Pierre I. van der Rest*
Department of Business Studies,
Leiden Law School,
Institute for Tax Law and Economics,
Leiden University,
Leiden, 2311 ES, The Netherlands
Email: j.i.van.der.rest@law.leidenuniv.nl
*Corresponding author
Abstract: This study explores the effects of competitor pricing levels
on relative revenue among over 4000 hotels in Europe over a 10-year period
(2004–2013). This sample of European hotels, which included both
independent and chain-affiliated properties, achieved higher revenue per
available room (RevPAR) than direct competitors when they positioned their
hotels with comparatively higher prices. These data revealed that regardless of
the economic situation of the time period, hotels that positioned with average
daily rates (ADRs) above those of their direct competitors benefited from
higher relative RevPAR even though they experienced lower comparative
occupancies. This finding was stronger for chain-affiliated vs. independent
hotels. Maintaining a consistent relative price over time did not significantly
affect revenue performance, controlling for hotel type and location. As is the
case with previous, similar studies, the findings argue for a firm, strategic
approach to pricing, rather than a reactive or strictly tactical approach.
Keywords: pricing strategy; revenue management; competitive dynamics;
price positioning; discounting; hotel industry.
Reference to this paper should be made as follows: Enz, C.A., Canina, L. and
van der Rest, J.I. (2016) ‘Hotel strategic pricing in Europe: a 10-year
exploration of competition’, Int. J. Revenue Management, Vol. 9, Nos. 2/3,
pp.92–107.
Biographical notes: Cathy A. Enz is the Lewis G. Schaeneman Jr. Professor of
Innovation and Dynamic Management and a Full Professor in Strategy at
Cornell University. She served as an Associate Dean for Industry Research and
Affairs and Executive Director of the Center for Hospitality Research from
2000 to 2003. She has published over 100 journal papers, book chapters
and four books in the area of strategic management. Her research has been