Abstract

This paper reports on a study of room rate pricing in the Irish hotel industry. The paper views pricing as a social and organisational practice embedded in the contextual setting of each hotel. An interpretivist research methodology was chosen and actioned using qualitative interviewing and case studies. Two contrasting major case studies provided insights into the practice of room pricing. A five-level institutional explanation/model, which connects micro- and macro-levels, is proposed, using Old Institutional Economic (OIE) and New Institutional Sociology (NIS) concepts. The findings suggest that room pricing is a function of context, cannot be subject to general rules and is path-dependent on a continuum between floor price and ceiling rack rate. Hoteliers wish to move the room rate along the continuum towards the rack rate, but face conflicting forces at macro- and micro-levels, yielding tradeoffs and extensive complexity.