Managing Channels of Distribution

Channels Pricing Analysis

Muong Thanh Hospitality

COLLEGE OF BUSINESS ADMINISTRATION | VINUNIVERSITY

MARK2060
Professor Stephen Pratt
Teaching Assistant. Lu Phuong Anh Tran

By

Bui Nguyen Nghia – V202100575

Bui Thuy Duong - V202000174
Hoang Mai Chi - V202100469
Nguyen Quang Trung - V202000028
I. Mường Thanh Hotel Overview

1. History & background:

M
​ ường Thanh Group was established in 1994 in the city of Dien Bien Phu, and it
stands as a Vietnamese-branded hotel conglomerate. It proudly holds the
distinction of being the largest private hotel system in Indochina, boasting
ownership of a comprehensive portfolio of 60 hotels with a collective capacity of
up to 12,000 rooms, strategically dispersed throughout the country. The hotel
chain typically has properties in key cities, tourist destinations, and business
hubs. Branch locations may include popular destinations such as Hanoi, Ho Chi
Minh City, Da Nang, Nha Trang, and more.

Its sub-brands include Muong Thanh Luxury, Muong Thanh Grand, Muong Thanh
Holiday, Green Land, and Golf Club.

2. Segmentation:
Muong Thanh Hotel strategically addresses distinct segments within the
hospitality market. This strategic approach involves the provision of
budget-friendly accommodations tailored to the needs of cost-conscious
travelers, mid-range establishments offering enhanced amenities, and upscale
properties designed to meet the preferences of those seeking luxurious
accommodations. Such meticulous segmentation serves to broaden the appeal
of the hotel chain, effectively accommodating a diverse array of guests
characterized by varying preferences and financial considerations.

3. Unique Selling Points (USPs):

​ Diverse Accommodation Portfolio: Muong Thanh Hotel presents a
comprehensive array of lodging alternatives, affording guests the flexibility to
select from economical to opulent sojourns, thereby adeptly accommodating a
spectrum of travel preferences and financial considerations.
​ Strategically Positioned Establishments: The hotel chain strategically situates
its properties in pivotal locales, affording guests seamless access to prominent
tourist attractions, business centers, and transportation hubs, thereby optimizing
convenience and accessibility.
​ Cultural Emphasis on Vietnamese Hospitality: Muong Thanh Hotel likely
accentuates the ethos of traditional Vietnamese hospitality, imparting to guests a
culturally immersive and affable experience reflective of the rich local heritage.
​ Robust Facilities and Amenities: The establishments within the Muong Thanh
Hotel portfolio are equipped with an assortment of facilities and amenities,
 encompassing dining venues, conference facilities, spas, and fitness centers.
This multifaceted offering is designed to augment the overall guest experience.
​ Dedication to Exemplary Quality: Muong Thanh Hotel places a discernible
emphasis on delivering quality service and accommodations, with an overarching
commitment to ensuring a uniform and gratifying experience for guests across its
diverse range of properties.

4. Our chosen Muong Thanh sub-brand: Muong Thanh Grand

Strategically located within central urban districts and townships, Mường Thanh
Grand entities epitomize contemporary conveniences and efficient services,
tailored to cater comprehensively to the multifaceted requirements of guests.
Positioned as the premium tier within the 4-star classification of the Mường
Thanh hotel chain, Mường Thanh Grand pledges expeditious customer service
delivery, facilitated by its proficient personnel.

5. Our chosen hotel: Muong Thanh Grand Hanoi Centre

Located on the historic street of Pho Tho Nhuom, at the heart of Hanoi's
administrative, cultural, and tourist center, Muong Thanh Grand Hanoi Centre is
conceived from the inspiration drawn from Hanoi immersed in the golden autumn
sunlight, the serene ambiance of every corner of each street. With tastefully
luxurious furnishings exuding a boutique charm, a warm and cozy atmosphere,
coupled with professional service, the impeccable offerings will make every guest
staying here feel as if it is their second home.

● Situated a mere 300 meters, approximately a 5-minute walk, from the Hanoi
International Exhibition Center (I.C.E), the venue for the Vietnam Expo 2022.
● A proximity of 350 meters to the historical site of Hoa Lo Prison.
● Only a 5-minute drive or a 9-minute walk to the Old Quarter of Hanoi and Hoan
Kiem Lake.

Muong Thanh Grand Hanoi Centre seamlessly combines the diverse flavors of
the Northwestern mountains, extending from culinary delights to beverages and
embodied by staff adorned in traditional Thai attire, resonating with the graceful
charm of the Ao Dai, a traditional Vietnamese long dress. This synthesis
promises guests an unexpectedly delightful experience.

II. Research Questions

Question: How do the prices of a Deluxe Double Room at Muong Thanh Grand Ha Noi
Hotel vary across different online travel agencies (OTAs) and hotel-owned website?
Objective: Analyze price variations for the Deluxe Double Room at Muong Thanh Grand
Hotel across different OTAs as the stay date nears
Methodology:
● Data Collection Parameters:
○ Room type: Deluxe Double Room
○ Booking Period: 1/12/2023 - 7/12/2023
○ Channels: Booking.com, Hotels.com, Expedia.com, Agoda, hotel website.
○ Booking Details Consistency: Maintaining constant guest count, breakfast
inclusion, and booking conditions.
○ Data Collection Time Frame: October 9 November 16
● Data recording:
○ Daily Price Check: Visit official website and OTAs daily, record daily room
price
○ Total Trip Price Calculation: Multiply daily price by 6 nights.
○ Excel Spreadsheet Use: Columns for Date of Collection, OTA, Daily Price,
Total Trip Price
● Data Analysis Approach:
○ Comparative Analysis: Compare pricing changes nearing the booking date
○ Time-based Analysis: Explore price changes nearing the booking date
○ Statistical Analysis: To analyze trend, average, and outlier identification,
conducting variance analysis
○ raphical Representation: Using charts/graphs for easier trend identification

III. Data Observations:

In the chart above, the ADR of OTA companies has not changed after a long period of
time, but what is noteworthy is that when it is 2 weeks (14 days from the time closer to
the booking date), the room price has increased. portion increased significantly.

1. Which channels tend to be higher and lower? What are the possible
reasons for this?

In comparison between the OTAs, the contributors of these OTAs include Traveloka,
Agoda, Expedia and Hotel website. According to collected data, Traveloka is the only
OTA that changes prices over time, the rest Agoda, Expedia and websites all keep the
same prices after days. In return, Traveloka's price is considered the lowest among the
4 participants, but gradually increases in the 14 days approaching the booking date.
Agoda, Expedia, website are the places with gradually increasing prices and the room
price on the website is the most expensive, 8.5% higher than Agoda and Expedia.
 IV. Data observation:
- As the staying date approaches, prices tend to escalate.
The phenomenon of escalating prices as the staying date approaches is often driven by
the dynamics of supply and demand, particularly in the context of the hospitality industry and
online travel agencies (OTAs). This pricing behavior is influenced by the increased data on
lodging demand that OTAs accumulate as the date draws nearer.
As highlighted by Cho et al. (2018), the pricing strategy tends to exhibit a pattern where
prices decline as the arrival date approaches, especially on non-busy days. However, in the final
days before arrival, when there is a high probability of accommodations being sold out, prices
can increase dramatically. This pricing strategy reflects the interplay between demand and
supply dynamics. The underlying principle is that as demand surges and available
accommodations become scarcer, prices are adjusted to mirror the heightened demand and the
potential scarcity in supply. As the probability of sell-out increases, consumers are less likely to
shift their plans or seek alternative accommodations (Zhu et al., 2022). This inelastic demand
reflects a sense of urgency and a reduced ability or willingness to substitute lodging options
(Petricek & Chalupa, 2020). The OTA's ability to analyze and respond to real-time data on
lodging demand allows for dynamic pricing strategies that adapt to the evolving market
conditions.
In the case of Muong Thanh, the rising demand and potential scarcity of available
accommodations near the travel date prompt a proactive adjustment of prices to capture the
value associated with the heightened demand. This pricing strategy aims to optimize revenue
for the accommodation provider while also meeting the needs of consumers seeking last-minute
bookings (Jang et al., 2019). As a result, the impact of rising demand on prices becomes more
evident and pronounced as the travel date draws nearer.
- Website charges the highest among the platforms most of the time and the price
tend to remain constant.

Within the available booking channels—Traveloka, Agoda, Expedia, and the hotel's
website—Muong Thanh's official website consistently features the highest charges. The stability
of its pricing pattern across the entire research period suggests a deliberate and possibly less
dynamic pricing strategy on the hotel's own platform, presenting a contrast to Traveloka's
strategy. Hotels often aim to maintain a consistent brand image, and stable pricing on their
official website can contribute to this perception. A steady price may reflect reliability and
transparency, building trust with potential customers (Bruhn et al., 2012).
Traveloka stands out as the most cost-effective option for users at the onset of the
research period. Its pricing aligns consistently with other channels until approximately a week
before the period concludes. This could be a strategic move to attract early bookings and gain a
competitive advantage in the market. The consistent pricing alignment with other channels until
a week before the period's end indicates a period of stable and relatively predictable pricing.
However, a notable on 26/11 when Traveloka's booking prices surge, surpassing those of other
online travel agencies (OTAs) and even exceeding the charges on Muong Thanh's official
website, may be an attempt to capitalize on last-minute bookings or respond to changing market
conditions (Jang et al., 2019).
- Traveloka, an OTA with comparatively high bargaining power, presents some of
the most appealing deals during non-peak periods.
Traveloka's strategic pricing during non-peak periods underscores the significance of its
robust bargaining power as an Online Travel Agency (OTA). Bargaining power in the context of
OTAs refers to their capacity to influence and negotiate terms with hotels, airlines, and other
travel service providers. This ability is pivotal in shaping pricing strategies and securing
favorable deals for the OTA (Manousakis & Mattas, 2020). During off-peak seasons, Traveloka's
pronounced bargaining power manifests in its capability to set lower prices. This calculated
move serves multiple purposes.

Firstly, it aims to attract a larger customer base by offering some of the most appealing
deals in the market. Lower prices during non-peak periods cater to cost-conscious travelers
seeking value for money, positioning Traveloka as an attractive option within the competitive
landscape. Moreover, the strategic use of lower prices during off-peak seasons contributes to
the enhancement of Traveloka's brand awareness. Customers are more likely to take note of an
OTA that consistently provides compelling promotions and affordable options. This not only
increases immediate customer engagement but also lays the groundwork for sustained user
loyalty over time (Karama & sayın, 2019). A critical aspect of Traveloka's approach is the
emphasis on increasing the conversion rate through appealing promotions (Tang et al., 2022).
Lowering prices during non-peak periods not only captures the attention of potential customers
but also encourages them to convert from browsing to booking. This optimization of the
conversion rate is integral to driving higher transaction volumes and revenue for the platform.
The overarching objective of Traveloka's strategic pricing during non-peak periods is to fortify its
market position in the highly competitive travel industry. The landscape described by Sharma &
Nicolau (2019) highlights the parallel competitions between hotels for customers and OTAs for
market share on booking platforms. In this dynamic environment, Traveloka's ability to
consistently offer competitive pricing reinforces its standing not only against other OTAs but also
against smaller travel agents vying for a share of the booking platform.

V. Overview of Hanoi Industry ADR

1. By measure
- In accordance with the STR report, spanning the years 2015 through 2022, the
month of November consistently registered a marginally higher Average Daily
Rate (ADR) in comparison to October. This temporal observation is substantiated
by a nominal 3% variance discerned between the mean ADRs of these two
sequential months across the aforementioned timeframe.

2. By day of week:
Analysis:
- On weekdays, discernible patterns of higher Average Daily Rates (ADR) are
evident compared to weekends, a trend consistently observed in both October
and November.
- Specifically, when considering individual days of the week, Wednesday
consistently emerges as having the highest ADR in both November and October,
exhibiting a consistent pattern relative to other months throughout the year.
Following the midweek peak in pricing, there is a subsequent decline in ADR as
the week progresses towards the weekend, reaching its lowest point towards the
end of the week. This observed trend underscores a systematic variation in ADR
based on the days of the week, highlighting the significance of midweek
dynamics in influencing pricing structures during these specified months.

Comparisons:
1. Demand tends to thrive at the end of the year, which is consistent to our data.
Rationale:
● Temporal Variation in Accommodation Pricing Strategies:
○ The temporal proximity to the scheduled reservation date intricately
influences the pricing dynamics within the hospitality domain. Defined as
dynamic pricing, this strategic approach involves a methodical modulation
of accommodation rates in response to the temporal progression toward
the intended stay date. As patrons draw nearer to their envisaged lodging
period, a commensurate escalation in pricing ensues, emblematic of the
nuanced interplay between evolving demand and supply dynamics
inherent in the lodging industry.
● Seasonal Amplification of Lodging Demand During Year-End Festivities:
○ The denouement of the calendar year heralds a notable upswing in the
requisition for accommodations, a phenomenon predominantly propelled
by the culmination of an array of festivals and celebratory events. This
heightened demand during the year-end period exerts a discernible
influence on the lodging sector, instigating an augmented proclivity for
lodging establishments. Consequently, there is a conspicuous surge in
reservation activity, concomitantly fostering an elevation in pricing
structures as establishments endeavor to align with and satiate the
amplified demand precipitated by the festive ambiance. This nexus
between temporal seasonality and celebratory occasions establishes a
salient nexus between increased demand and the concurrent pricing
dynamics during this period.

2. In our data of Muong Thanh, weekend shows higher ADR than weekdays.
 Rationale:
● A predominant proportion of patrons at the Hanoi hotel are oriented towards
business-related objectives. Conversely, Muong Thanh positions itself as a hotel
primarily tailored for holiday staycations, emphasizing a distinctive focus on
leisure and recreational pursuits rather than being expressly designed to cater to
the exigencies of business-related lodgings.

VI. Managerial Implications

Project Name Room Count Project Phase Affiliation Name

Fairfield by Marriott Hanoi 441 In Construction Fairfield Inn

Somerset Metropolitan West Hanoi 364 In Construction Somerset

Somerset Heritage Tay Ho 202 Planning Somerset

Total 1007
Catalog of advancements in projects within the comparable segment as Muong
Thanh Grand Hotel (STR, 2023)

The escalated demand for hotel reservations during the New Year and year-end festivals often
presents substantial challenges in the realm of price management, leading to pronounced
differentials in room pricing. Concurrently, numerous hotels within the same market segment as
Muong Thanh Grand are presently undergoing construction in Hanoi, boasting room inventories
of up to 1007 rooms. The ensuing recommendations aim to assist Muong Thanh Grand Ha Noi
Center Hotel in addressing the aforementioned issues:

1. Forecasting and Planning:

Utilize sophisticated forecasting tools or historical data to accurately anticipate the
anticipated demand for the year's end. By meticulously projecting demand, proactive
planning becomes feasible, enabling the effective allocation of resources and the
adjustment of staffing levels to align with projected demand. Moreover, regular
monitoring of reports concerning impending projects set to commence operations is
imperative to formulate judicious competitive strategies.
2. Encourage Early Booking:
To contend with the heightened year-end demand, incentivize early bookings by
extending preferential offers to customers who book in advance. This not only
streamlines the management of reservations but also affords customers the opportunity
to secure accommodations at potentially more favorable rates prior to the surge in
demand.
3. Loyalty Program:
Instituting or enhancing a loyalty program represents a strategic solution for Muong
Thanh Grand Hotel to attract and retain customers. Gratuities for loyal patrons in the
 form of special offers, exclusive discounts, or supplementary privileges serve to cultivate
loyalty and mitigate the impact of price escalations. Additionally, this recommendation
contributes to the cultivation of a positive customer experience—from the initial booking
phase through service delivery and departure. Establishing a sense of individualized
attention and care for customers enhances the likelihood of their return and their
inclination to recommend the establishment to others.

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