Cornell Study Finds that Lower Hotel Prices Cost Hotels Money in Good Times and Bad
“Our findings were consistent, despite the economic situation,” explained Canina, an associate professor at Cornell. “Hotels that maintained average daily rates above those of their direct competitors experienced lower occupancies compared to those other hotels, but they recorded higher relative RevPARs. This was true in all market segments.”
Added Lomanno, who is president of STR: “Our overall results suggest that the best way to have better revenue performance than your competitors is to maintain higher average rates.” Lomanno pointed out that the researchers were careful to analyze only comparable hotels in each competitive group. Most hotels that charged relatively lower rates than their competitors had relatively higher occupancy, but that did not mean stronger RevPARs.
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