Last-minute hotel-booking and frequency of dynamic price adjustments of hotel rooms in a cosmopolitan tourism city

Although the Internet has contributed to lowering the cost of adjusting hotel room rates on Internet-enabled distribution channels and promoted last-minute hotel booking, research on the frequency of dynamic price adjustments of hotel rooms remains scarce. Using panel data techniques involving count data models, this study examined online pricing data of hotels in a cosmopolitan tourism city to identify supply-side factors and location attributes that can be used in conjunction with the established demand-based pricing strategy to explain the frequency of adjusting room rates. After controlling for spatial locations and demand, results indicated that the frequency of room rate change is also related to seller density, hotel size, star rating, and consumer heterogeneity reflected in different booking days. Practically, the findings have revealed subtle differences in the implementation of demand-based dynamic pricing that can be used by practitioners and consumers for strategic decision-making.