Optimal Pricing Strategy of Hotel for Cooperative Travel Agency

In practice, in order to improve its revenue, hotel cooperates with travel agency, website, government, corporation, etc., and provides them with low room rate. This paper does research on the pricing problem of hotel for long-term cooperative travel agency. Through building pricing model, this paper proves that cooperation is beneficial to hotel and travel agency, derives the optimal pricing strategy of hotel, and analyzes the effects on the room rate for travel agency and hotel revenue, of hotel capacity, standard room rate, daily variable cost, the number of individual customers, and that of customers from travel agency. Eventually, it suggests some managerial implications.