The research presented in this thesis is centred on a study of room rate pricing in the Irish hotel industry which, since the late 1980s, has enjoyed a period of unparalleled expansion and has been an engine of growth for the economy. There has been little research on this aspect of the industry. Overall, the main research objective was to inquire into the way reality is perceived by hoteliers and to find out how they grapple with room pricing decisions. Ontologically, the research views pricing as a social and organisational practice embedded in the contextual setting of each hotel, rather than being a technical tool used to achieve economic rationality, as in more mainstream functionalist / positivist research. Therefore, the interpretivist research methodology and the research methods of qualitative interviewing and case studies were chosen. Two contrasting major case sites provided detailed insights into the practicalities of room pricing. The empirical findings clearly show that the manager is boundedly rational in the face of the inter-connectivity of room pricing with other customer-related and marketing decisions. Room pricing is also time-dependent and subject to uncertainty of market demand. Uncertainty can be reduced to an extent, by controlling price setting and proactive planning by the manager. This can be seen in the formal routines for setting guiding parameters (ceiling rack rate, mid-point budgeted yield and minimum floor price) in advance of the season, rules for discounting, routines to allocate blocks of rooms to bulk business etc., other informal routines and good marketing. However, a balance of uncertain demand remains, which tends to be handled reactively by intuition and luck, as the season unfolds. The findings suggest that room pricing is a function of context, cannot be subject to general 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 face conflicting 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, due to its ahistorical nature and lack of congruence with empirical reality. A FIVE LEVEL institutional explanation, which connects micro and macro levels, is proposed, using Old Institutional Economic (OIE) and New Institutional Sociology (NIS) concepts. 10
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:556321 |
| Date | January 2002 |
| Creators | Mattimoe, Ruth |
| Publisher | University of Manchester |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
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