Exploring ADR Trends: A Data Mining Approach to Hotel Room Pricing, Cancellations, and EDA

Abstract

This study investigates the intricacies of hotel reservation cancellations by analyzing a comprehensive dataset that includes information from both City Hotel and Resort Hotel. Through a thorough examination of various aspects, the research provides detailed insights into cancellation tendencies, daily rates, seasonal trends, and the influence of geographic factors and market segments on cancellation behavior. The overall cancellation and non-cancellation ratios indicate a notable non-cancellation rate of 62.86%, showcasing a high level of guest confidence in their reservations. Conversely, the 37.14% cancellation ratio raises concerns about potential negative repercussions. A comparative analysis between City Hotel and Resort Hotel reveals a significant difference in cancellation rates, emphasizing the need for tailored strategies at City Hotel to enhance booking stability. The study on Average Daily Rate (ADR) for both hotels bring attention to price differences and seasonal trends. Resort Hotel's higher ADR suggests potential advantages in location or amenities. Seasonal trends, particularly the highest ADR during the summer, provide valuable insights for resource planning. The variation in cancellation rates based on countries emphasizes the importance of focused strategies in regions with high cancellation rates, as seen with Portugal having the highest cancellation rate (77.70%). Analysis of hotel customer market segments identifies Online Travel Agencies (OTA) as the segment with the highest cancellation rate (46.97%). These findings present opportunities for tailored marketing and cancellation policies based on the characteristics of each segment. In conclusion, this research offers strategic insights for hotel managers to enhance booking stability, design competitive pricing policies, and understand the impact of geographic factors and market segments on cancellation behavior.