Cornell Hotel Management Study Finds Discounting Did Little to Offset Revenue Loss During Economic Downturn

Hotels worldwide faced a difficult decision regarding which hotel marketing tactics to apply when travel levels plummeted in 2009. They could try to drive room-nights by matching competitors' discounted rates, or they could hold rates steady and watch occupancy drop. A new hotel management study from the Cornell Center for Hospitality Research found that many hoteliers admitted engaging in price wars but they wished they had held firm on rates while using other tactics. The study, "Successful Tactics for Surviving an Economic Downturn: Results from an International Study," by Sheryl E. Kimes, is available at no charge at ww.hotelschool.cornell.edu/research/chr/pubs/reports/2010.html.
Kimes, the Singapore Tourism Board Distinguished Professor of Asian Hospitality Management at the Cornell School of Hotel Administration, surveyed 980 hotel managers worldwide early in 2010 to determine what tactics they used in response to the Great Recession, and how well those tactics worked. The tactics used were, in descending order: discounting, marketing initiatives, obscuring room rates, and cost cutting.