Myth of early booking gains

This paper investigates the relationship betweenbooking lead time and hotel room rates while controllingfor various booking, room and hotel characteristics. Dataare based on big data drawn from a hotel reservationdatabase covering about 123,000 bookings over a 5-yearperiod. Quantile estimations for online bookings show thatearly bookings are associated with the highe st room rates,while late bookings have the lowest ones. For lower pricedrooms of leisure guests booked offline, there is a U-shapedrelationship with the lowest prices booked between 10 and24 days before the check-in day. Similarly for businessguests, a U-shaped pattern can be found for high-pricedbookings. Overall, price variations between bookings atdifferent points in time range between 10% for externalonline booking s and up to 28% for offline bookings ofleisure guests. The results for hotel bookings stand incontrast to empirical evidence for airfares and train tickets.