How do hotels adapt their pricing strategies to inflation?

The impact of inflation rates over the past three decades on hotel pricing and revenue has been overlooked in the literature. This study addresses this gap by examining how hotels adapt their pricing strategies in response to inflation, considering their diverse business models and customer segments. The findings reveal that hotels adeptly increased RevPAR during inflation, adjusting rates without compromising occupancy or revenue. Variations in ADR and RevPAR responses suggest greater flexibility in pricing, particularly among hotels serving more affluent customer bases. However, in high inflation periods, even with the implementation of flexible pricing strategies, some hotels experienced a slowdown in revenue growth under high inflation, challenging industry resilience perceptions. However, certain hotels effectively employed strategic pricing, achieving accelerated revenue growth that surpassed the impact of high inflation. In summary, the study provides valuable insights into how hotels navigate pricing strategies amid inflationary economic conditions.