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" An institutional study of room rate pricing in the Irish hotel industry "
Mattimoe, Ruth
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Latin Dissertation
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| Record Number
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1098937
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TLets556321
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| Main Entry
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Mattimoe, Ruth
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| Title & Author
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An institutional study of room rate pricing in the Irish hotel industry\ Mattimoe, Ruth
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| College
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University of Manchester
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| Date
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2002
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| student score
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2002
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| Degree
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Ph.D.
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| Abstract
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The research presented in this thesis is centred on a study of room rate pricing in the Irishhotel industry which, since the late 1980s, has enjoyed a period of unparalleled expansionand has been an engine of growth for the economy. There has been little research on thisaspect of the industry. Overall, the main research objective was to inquire into the wayreality is perceived by hoteliers and to find out how they grapple with room pricingdecisions. Ontologically, the research views pricing as a social and organisational practiceembedded in the contextual setting of each hotel, rather than being a technical tool used toachieve economic rationality, as in more mainstream functionalist / positivist research.Therefore, the interpretivist research methodology and the research methods of qualitativeinterviewing and case studies were chosen.Two contrasting major case sites provided detailed insights into the practicalities of roompricing. The empirical findings clearly show that the manager is boundedly rational in theface of the inter-connectivity of room pricing with other customer-related and marketingdecisions. Room pricing is also time-dependent and subject to uncertainty of marketdemand. Uncertainty can be reduced to an extent, by controlling price setting and proactiveplanning by the manager. This can be seen in the formal routines for setting guidingparameters (ceiling rack rate, mid-point budgeted yield and minimum floor price) inadvance of the season, rules for discounting, routines to allocate blocks of rooms to bulkbusiness etc., other informal routines and good marketing. However, a balance ofuncertain demand remains, which tends to be handled reactively by intuition and luck, asthe season unfolds.The findings suggest that room pricing is a function of context, cannot be subject togeneral rules and is path dependent on a spectrum between floor price and ceiling rack rate.Hoteliers wish to move the room rate along the continuum towards the rack rate, but faceconflicting forces at macro and micro levels, yielding trade-offs and extensive complexity.The rational, optimising decision-maker of the Neo-Classical (NCE) model is rejected, dueto its ahistorical nature and lack of congruence with empirical reality. A FIVE LEVELinstitutional explanation, which connects micro and macro levels, is proposed, using OldInstitutional Economic (OIE) and New Institutional Sociology (NIS) concepts.10
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University of Manchester
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