engleski

Strategic pricing policies adopted by 4-star hotels located on the Croatian coastline

Purpose. Tourism is one of the main drivers of Croatia’s economic performance. Out of the total number of accommodation facilities, 96% are located on the coast. The four summer months themselves generate more than 86% of the total number of overnight stays. The paper concentrates on a sample of 4-star hotels, which make up for 46% of the total number of hotel accommodation units and 45% of the total number of permanent hotel beds, making them the main generator of total revenue in the hotel industry in Croatia. Therefore, it is important to understand their competitive pricing and quantitative impact on the Occupancy Rate (Occ) and the Revenue Per Available Room (RevPAR). Design. The research is based on a database taken from Horwath Hotel Survey (HHS), covering three datasets over a period of three years (2015- 2017). The paper uses structured data analysis to test the hypothesis, with a hotel selected as the main unit of the analysis. Approach. The comparative analysis of all hotels within the database, identified 42 hotels with data available for all three years. Out of these 42 hotels, all outliers (refurbished hotels and performance outliers) have been removed. As a result, 32 hotels have been filtered from the set and included in the sample for further statistical testing. Methodology. The analysis focuses on the Average Daily Rate (ADR), the Occupancy Rate (Occ) and the Revenue Per Available Room (RevPAR), their dynamics and changes. The multivariate regression analysis defines RevPAR as the dependent variable and ADR and Occ as independent variables. The analysis is performed on two different segments of the hotel sample: the first one recording a growth rate of ADR above the sample mean, and the second one, with a ADR growth rate below the sample mean. The following two periods are analysed separately: 2015-2016 and 2016-2017. Findings. The results of this study reveal that the 4-star hotels whose average prices have risen above the sample average, are experiencing lower growth rates of Occ, but higher growth rates of RevPAR. This finding confirms the underlying hypothesis of the paper. An additional conclusion is that better strategic price management enables higher growth rates of RevPAR. Originality. This is the first time this type of research has been conducted in Croatia, covering a period of three years and concentrating on the most important hotel accommodation segment. Conclusions of this study are in line with the referenced research conducted by Enz, Canina, Lommano, 2010 ; confirming the quantitative impact and importance of competitive pricing for hotels.

Strategic Pricing ; Competitive Pricing ; Occupancy Rate ; Average Daily Rate ; Revenue Per Available Room

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