HotelTonight usage and hotel profitability

Abstract

Purpose

The purpose of this study is to empirically evaluate the influence of a hotel’s listing on the last-minute hotel booking app, HotelTonight, and average daily rate (ADR) on the hotel’s net operating income (NOI). The study examines the mediating effect of hotel occupancy rate on the relationships between ADR and hotel app usage in terms of NOI.

Design/methodology/approach

The data for the study was graciously provided by Smith Travel Research, Inc. for 80 hotels located in the top Florida destinations listed on the HotelTonight app. Hierarchical multiple regression with a mediation effect was used in the study to test the mediating effect of occupancy between hotel app usage and ADR with NOI.

Findings

The research results show a positive association between a hotel’s HotelTonight listing and ADR in terms of its NOI. Occupancy is found to have a full mediation effect between a hotel’s usage of the mobile app and NOI.

Originality/value

Mobile apps that specialize in last-minute hotel bookings have proliferated in recent years by providing hotels a mobile platform to increase hotel occupancy. However, there is a dearth of studies examining the effect these apps have on a hotel’s bottom line profitability or NOI.

Citation

Makki, A.M., Singh, D. and Ozturk, A.B. (2016), "HotelTonight usage and hotel profitability", Journal of Hospitality and Tourism Technology, Vol. 7 No. 3, pp. 313-327. https://doi.org/10.1108/JHTT-12-2015-0050