Maximizing Profits Through Optimal Pricing and Sustainability Strategies: A Joint Optimization Approach

Abstract

Implementation of optimal pricing and sustainability strategies are among the most efficient approaches for hotels to maximize their profits. This study uses a theoretical modeling approach to identify the joint optimal pricing and sustainability effort levels. In addition, through sensitivity analysis, this study examines how external factors may influence the optimal pricing and sustainability efforts decisions. Findings indicate that customers’ willingness to pay a premium is a critical determinant of sustainability action level while price sensitivity of target markets and cost-of-sustainability actions are two main inhibitors of sustainability practices at hotels. Findings further suggest that factors that positively influence demand levels also play critical roles in determining optimal room rates. However, findings suggest that optimal room rate is negatively influenced by price sensitivity of customers, customers’ sensitivity to premium charged to cover the cost of sustainability actions, and the unit cost of sustainability actions.

实施最优定价和可持续发展战略是酒店利润最大化的最有效方法之一。本研究使用理论建模方法来确定最优定价和可持续发展措施的最佳结合点。此外，本研究通过敏感性分析考察了外部因素对最优定价和可持续发展措施决策的影响。结果表明，房客愿意支付溢价是可持续发展措施的关键决定因素，而目标市场顾客的价格敏感性和可持续发展措施的单位成本是酒店可持续发展实践的两个主要抑制因素。调查结果进一步表明，积极影响需求水平的因素也在确定最优房价中发挥关键作用。然而，研究结果也表明，房客的价格敏感性、房客对覆盖可持续发展措施成本溢价的敏感性以及可持续发展措施的单位成本等，都会对最佳房价产生负面影响。

Keywords:

• Optimal decision
• pricing
• profit
• sensitivity analysis
• sustainability