Emerging price optimization models systematically incorporate competitor price information into the derivation of optimal price points. While consideration of competitor pricing at this tactical level is essential to maximizing short-term revenues, the long-term impact of competitive price positioning on revenue performance should not be overlooked. This study examines the effect of two key dimensions of strategic price positioning - relative price position and relative price fluctuation - on the revenue performance of 6998 US hotels over an 11-year period. It finds that revenue performance is strongest for hotels that price higher than the competition and maintain a consistent relative price over time. Implications for revenue management practitioners are discussed.
Enz, C. A. (2013). Strategic price positioning for revenue management: The effects of relative price position and fluctuation on performance[Electronic version]. Retrieved [insert date] from Cornell University, School of Hotel Administration site: http://scholarship.sha.cornell.edu/articles/611