Correspondence: Thomas M. Walker, RoomRevenew, PO Box 2156, Keller, Texas 76248, USA. E-mail: RoomRevenew@gmail.com

¹is Managing Director of RoomRevenew, a consulting enterprise focused on providing practical guidance to hotels' revenue management programmes through process and results diagnosis, and Best Practices training. The approach can support automated revenue management systems, but is more concerned with business practices, and thus is equally well positioned to assist properties using other methods. An industry veteran of nearly 30 years, Tom excels at rendering complex data and concepts into meaningful information for management purposes.

Received 13 May 2009; Revised 13 May 2009.

Abstract

In 2004, Mark Lomanno of Smith Travel Research, together with Linda Canina and Cathy Enz, Cornell University, published what has proven to be an influential paper titled 'Why Discounting Doesn't Work: The Dynamics of Rising Occupancy and Falling Revenue Among Competitors'. The paper concludes that hotels discounting more aggressively than their competitors achieve a comparative occupancy premium, but that the increase does not offset the room rate sacrifice, eroding RevPAR compared with competitors. This paper tests the argument's soundness in terms of data reliability and methodology. If the authors' case is flawed, hotels according it undue credence could be hurt.