The role of social media as a distribution channel for promoting pricing strategies

Abstract

Purpose

The purpose of this paper is to investigate how using social media (SM) as a tool to influence demand motivates the distribution of different price promotion strategies to encourage consumers to utilize direct bookings, along with how this impacts revenue strategies and profitability.

Design/methodology/approach

This study surveyed hotel executives who hold managerial positions and revenue managers with a direct influence on pricing decisions and developed multiple regression analysis models for various pricing approaches.

Findings

This study confirms the relationship between distribution channels and dynamic pricing strategies, although the same is not true with respect to traditional pricing techniques. The authors found that the adoption of SM as a strategic tool provides a platform to promote tactical revenue management strategies and to practice differential pricing motives.

Originality/value

The findings of the study will help hotel revenue managers to take into account a new way of thinking – namely, an interactive response to consumers’ preferences to improve profitability, based on different pricing methods distributed through SM. In this context, SM has elevated pricing strategies to a new and particularly challenging level.

Citation

Ampountolas, A., Shaw, G. and James, S. (2019), "The role of social media as a distribution channel for promoting pricing strategies", Journal of Hospitality and Tourism Insights, Vol. 2 No. 1, pp. 75-91. https://doi.org/10.1108/JHTI-07-2018-0040