Keywords
hotels, discounting, rational expectations theory, error correction model
Abstract
The central intent of this econometric case study analysis is to examine the relationship between discounting room rates and hotel financial performance. The study provides a theoretical framework that investigates the fundamentals of discounting and empirically assesses the efficacy of the discounting process in the lodging industry. The study adopts an error correction model to properly account for the dynamics of the industry. The results indicate that the variables may be modeled as an integrated process and which are linked in the long run and also possess a short-term relationship. The research findings suggest that discounting works both in the short term and the long term only if the discount rate exhibits serial correlation or nonstationary tendencies.
Publication Date
8-12-2012
Original Citation
Croes, R. and Semrad, K. (2012). Does Discounting Work in the Lodging Industry. Journal of Travel Research. 51(5), 617-631.
Number of Pages
617-631
Document Type
Paper
Language
English
Source Title
Journal of Travel Research
Volume
51
Issue
5
Copyright Status
Unknown
Copyright Date
2012
Publication Version
Post-print
College
Rosen College of Hospitality Management
Location
Rosen College of Hospitality Management
STARS Citation
Croes, Robertico R. and Semrad, Kelly J., "Does Discounting Work in the Lodging Industry?" (2012). Faculty Scholarship and Creative Works. 278.
https://stars.library.ucf.edu/ucfscholar/278