Using novel data on the pricing for hotel rooms in Paris during the summer of the 2016 European Football Cup, we document the co-existence of uniform and bespoke pricing within the same industry and even within the same firm. Although stay dates have heterogenous potential demand, hotels initially price them uniformly. However, as time goes by, they progressively set customized prices. We show that standard revenue management techniques can explain the shift and find evidence that the inability to form expectations about future demand was a determinant of the initial choice of uniform prices. Finally, we find that firm characteristics have a role in shaping the transition.
From Uniform to Bespoke prices: Hotel pricing during EURO 2016
Piga Claudio Antonio Giuseppe.;
2023-01-01
Abstract
Using novel data on the pricing for hotel rooms in Paris during the summer of the 2016 European Football Cup, we document the co-existence of uniform and bespoke pricing within the same industry and even within the same firm. Although stay dates have heterogenous potential demand, hotels initially price them uniformly. However, as time goes by, they progressively set customized prices. We show that standard revenue management techniques can explain the shift and find evidence that the inability to form expectations about future demand was a determinant of the initial choice of uniform prices. Finally, we find that firm characteristics have a role in shaping the transition.
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