ARE WE EFFICIENTLY MANAGING BREAKFAST PRICING IN THE HOTEL INDUSTRY?
As part of the R+D+i dimension of the Alimara University Hotelacademic research allows us to generate knowledge for the hotel industry with the objective, among others, of proposing innovative solutions and generating a return of value for the sector.
In this regard, Dr. Oriol Anguera-Torrell (CETT-UB Barcelona School of Tourism, Hospitality and Gastronomy) and Dr. Juan Luis Nicolau (Virginia Tech) have published an interesting article in the International Journal of Hospitality Management that questions whether we are efficiently managing the price of breakfast in the hotel industry.
The study starts from a common observation: many hotel chains and independent hotels still charge a fixed price for adding breakfast to a reservation, regardless of the room rate. In this context, the authors analyze how the recently introduced theory of salience in consumer decisions may influence the decision to add additional components to a reservation, such as breakfast.
The article theoretically demonstrates that the fixed supplement to include breakfast makes the demand for breakfast-inclusive rooms directly dependent on the room price. Furthermore, the empirical analysis, based on data from more than 22,000 bookings at the Alimara University Hotel, confirms that the probability of selling breakfast-inclusive rooms increases after a rise in room price, especially when consumers do not anticipate this increase.
According to the study, demand for breakfast-inclusive rooms increases when the room price rises, but this relationship is less pronounced if consumers do not anticipate the price increase. This suggests that customers perceive the additional cost of breakfast as more justified when the room price is higher but expected, aligning with salience theory.
These findings provide new insights for revenue management strategies in hotels, which could optimize dynamic rates in breakfast, but also in other hotel services to maximize profitability.
In addition, it highlights the importance of considering how changes in pricing can influence customers' perception of value.
Studies such as this one provide us with a valuable explanation for understanding customers' decisions in the hospitality industry, improving their experience and making their stay as satisfying as possible.
If you want to know more about this topic, the article is available at the following link.
