The effect of price dispersion on hotel performance

Previous studies have concentrated on comparing price dispersion and price level between offline and online channels. The primary objectives of this study are to (a) investigate the relationships between offline price dispersion and a company's performance, (b) examine the relationships between online price dispersion and a company's performance and (c) investigate the effect of price dispersion between offline and online channels on a company's performance. The findings show that a decrease in online price dispersion has a positive impact on a hotel performance. Therefore, to enhance hotel performance, hotel marketers should manage pricing strategies for multiple online channels; in addition, hotel companies should pursue rate parity policies across different online channels. Conversely, the results show a positive relationship between offline price dispersion and hotel performance. It is suggested that customization and bundling strategies for offline channels enhance the overall profitability of hotels. The findings advance knowledge of consumers' purchasing behaviour and sellers' pricing strategies.