Myth of early booking gains

This paper investigates the relationship between
booking lead time and hotel room rates while controlling
for various booking, room and hotel characteristics. Data
are based on big data drawn from a hotel reservation
database covering about 123,000 bookings over a 5-year
period. Quantile estimations for online bookings show that
early bookings are associated with the highe st room rates,
while late bookings have the lowest ones. For lower priced
rooms of leisure guests booked offline, there is a U-shaped
relationship with the lowest prices booked between 10 and
24 days before the check-in day. Similarly for business
guests, a U-shaped pattern can be found for high-priced
bookings. Overall, price variations between bookings at
different points in time range between 10% for external
online booking s and up to 28% for offline bookings of
leisure guests. The results for hotel bookings stand in
contrast to empirical evidence for airfares and train tickets.