Investigating Pricing Strategies of Hotel Rooms in City Centre: A Case Study

In this article, the pricing strategies among hotel rooms dwelling in the city centre are investigated. A sample of 25 hotels with star ratings from 2 to 4 are selected, all situated in the heart of Georgetown, Penang. The primary data is collected, in which hotel room prices were observed for December 2018 through online travel operator, agoda.com platform. A comparative study of four forecasting methods, i.e. simple moving average, adaptive response rate exponential smoothing and multiplicative decomposition method were used to investigate the patterns of pricing strategies for these hotel rooms, with their accuracies being measured. The findings revealed that the average pricing of the room is at its peak before the public holiday, with the seasonal pattern being present, in which the prices are higher on Fridays weekly. Room prices for a hotel with higher star rating were also observed to be more sensitive to holiday effects as opposed to the hotel with a lower star rating.