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An analysis of hotel room rates in Macao

English Abstract

This research examined Macao’s hotel room rates offered by the hotels and the online vendors. Since 1999 China’s takeover, Macao has been building thousands of hotel rooms. It has also developed a wide choice of MICE facilities, restaurants and casinos. In terms of the World Tourism Organization international ranking, Macao was ranked the 20th position around the world and the 5th in Asia Pacific region according to the number of international visitor arrivals in 2011. Although Macao has become one of the international cities, there are limited studies about Macao room rates. This study focused on comparing the hotel room rates that were available to visitors on different channels. These channels included the hotels’ websites and their offline channels, as well as the websites of national and regional online travel agencies. The aim of this research is to determine if Macao hotels have price parity across their distribution channels. If not, this research attempts to find out which distribution channel offered the lowest room rate to customers. Besides, the research also compared the room rates that the reservations were made at different times so as to explore whether room rate would fluctuate when room reservations were made at different times. Lastly, the imposition of cancellation policy was also observed to verify whether hotel room rates would be influenced by cancellation policy. This research involved quantitative and qualitative approaches. A comparative analysis using the quantitative approach revealed significant differences in average room rates across different channels in the 5-star category. The empirical results showed that Ctrip, the travel agency in China tended to provide the lowest room rates among the selected distribution channels. Hotel’s voice channel tended to offer the highest room rates among the selected distribution channels for all hotel categories. Moreover, the research found that the average room rate in 5-star hotels increased when the date of making room reservation drew closer to the date of stay. Apart from the quantitative research, qualitative research was conducted for obtaining Macao practitioners’ opinions. The hotel managers interviewed in this study agreed with the quantitative results and assisted in the interpretations. The hotel managers shared that 5-star hotels might have more diverse pricing strategies because 5-star hotels had sufficient resources to support their businesses. The hotel managers agreed that the room rate on direct channels would be higher than indirect channels because hoteliers wanted to protect third party intermediaries which the hoteliers considered as their partners. Further, the room rate on direct online channel is lower than direct offline channel due to consumer behavior. Hoteliers would consider consumer behavior to decide their prices. Regarding timing element, the hotel managers advised that timing element was not a crucial factor to room rates. Other factors such as market price and competitors’ promotion schemes may play more important roles. Therefore, the hotel mangers commented that it was not necessary for room rate to be raised when the date of stay draws closer. Lastly, having observed the imposition of cancellation policy, the results showed that two kinds of cancellation policies were being used, 1) Non refundable cancellation policy and 2) A certain number of days cancellation policy. The primary objective of imposing cancellation policy is to protect hotel revenue and manage consumer behavior. The logic of the imposition and the impact to the room rates were clarified. To conclude, this research learnt the current hotel pricing practice in Macao and observed the current impositions of cancellation policy. The results of this research provided more information on hotel pricing practice to consumers and industry practitioners.

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Fong, Wai San


Faculty of Business Administration


Department of Management and Marketing




Hotels -- Macau

Hospitality industry -- Macau

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