Research On High-class Hotel Room Rate Based On Hedonic Theory

China’s high-class hotel industry is facing increasingly fierce competition causedby worn out demand and increased supply. Therefore, for the hotels, revenuemanagement has been more important than ever. Meanwhile, the rapid developmentof the Internet and the popularization of online hotel book technology have reducedinformation asymmetry between customers and hotels which raises higher challengefor the hotel room rate pricing ability. According to the Hedonic theory, price productis composed of implicit prices of product attributes. Currently hotel room hedonicestimates have analyzed many attributes of hotel rooms, however, by limited to theresearch data sources and online hotel book development, they used to pay littleattention to online-review or score of room attributes and book-time attributes.Moreover, the existing differences of attributes in star segment markets are lessconcerned which leads to a weaker guidance.This study generated data from meta-booking engine to refine the hotel room ratehedonic model by combining the existing pricing theories and methods andonline-booking information effects. Hotel internal attributes, hotel external attributesand time attributes are three dimensions that initially be made and variables likerooms size, online facility quality score, catering quality score, and opponents numberare added to the model as well. Hence, the optimized and extended variables make thenew model has higher fitting degree to reality.In the empirical research part, this study collected the data of3-5star hotels inBeijing Central Business District to establish the overall market model and starsegment markets. Two samples independent t-tests are used for the hotel room rate aswell. The result shows that: firstly, within the demonstration area, different implicitprices of hotel internal feature are existing in different segment market; secondly, theimplicit prices of external feature cannot be ignored; thirdly, time attributes do notshow significant implicit price; fourthly, logarithmic forms of hedonic models workbetter than others. At the end, this study indicated that China’s hotel should makemore efforts on efficient room rate pricing and differentiation competition by use ofhedonic model and the implicit prices of futures while cautiously made location andstar choice to be more competitive and maximize the revenue.