Please use this identifier to cite or link to this item: http://hdl.handle.net/10316/87172
Title: Hotel location when competitors may react: A game-theoretic gravitational model
Authors: Godinho, Pedro
Phillips, Paul
Moutinho, Luiz
Keywords: Tourism site location; Game theory; Genetic algorithms; Spatial interaction models
Issue Date: Dec-2018
Publisher: Elsevier
Abstract: This paper presents a hotel location model that incorporates concepts from both game theory and gravitational site location models. We consider a hotel chain intending to build new hotels in a given region. Customers travel to the region to visit some specific points, termed “attractions”, and they choose a hotel according to room price, location and hotel attractiveness. Competitor hotels react to the new hotels by changing prices, in order to maximize their own profits, so the final set of prices will be a Nash equilibrium. We propose an iterative procedure for finding the equilibrium prices and a genetic algorithm-based procedure for finding the optimal strategy, in terms of new hotels to be built and respective typologies. Using a mini case, we illustrate and analyse the influence of several parameters. Then, we present computational experiments, concluding that the proposed procedures are effective in finding good solutions for the model.
URI: http://hdl.handle.net/10316/87172
ISSN: 0261-5177
DOI: 10.1016/j.tourman.2018.06.014
Rights: embargoedAccess
Appears in Collections:I&D CeBER - Artigos em Revistas Internacionais

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