Data Analysis: CHL Hospitality Accommodation Brand Pricing Case Study

This case study, prepared for CHL Hospitality, analyzes accommodation pricing across different brands, states, and locations. The analysis addresses five key issues: current average pricing, price differentiation among brands, price differentiation between states, price differentiation between locati...Read More

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Table of Contents
Introduction................................................................................................................................3
Issue 1: Current average pricing of the accommodation by brands, states, and locations.........3
Issue 2: Whether price differentiation exists among the accommodation brands......................4
Issue 3: Whether price differentiation exists between states among the accommodation brands
....................................................................................................................................................4
Issue 4: Whether price differentiation exists between locations among the accommodation
brands.........................................................................................................................................5
Issue 5: Whether the introduction of the Comfort brand has increased internal competition
among the other accommodation brands....................................................................................5
Conclusion..................................................................................................................................6
Bibliography...............................................................................................................................7

Introduction
The importance of business analyst has grown over the year as they directly involved in
strategic decision making. The present case, as the CEO of the firm, CHL hospitality
subsidiary, Oscar Cunningham has asked to conduct a statistical analysis of the current
accommodation business data, being the analyst, all five issue mentioned in the below have
been taken into account and performed a detailed analysis to find out the solution to them.
Once the individual issues have been addressed with the help of statistical tool, the analyst
has provided an overall conclusion too.
Issue 1: Current average pricing of the accommodation by
brands, states, and locations
Brand No of Hotel Average of Price
Resort 48 200
Cottage 48 203
Classic 48 201
State Average of Price
NSW 201
QLD 202
VIC 201
Brand by State NSW QLD VIC Grand Total
Resort 199 201 200 200
Cottage 202 204 202 203
Classic 202 202 201 201
Grand Total 201 202 201 201
Location Average of Price
Metropolitan Cities 202
Regional Cities 201
Grand Total 201
Brand by Location Metropolitan Cities Regional Cities Grand Total
Resort 200.1129167 200.428 200.2704167
Cottage 202.2508333 203.062 202.65625
Classic 202.31375 200.612 201.4627083
Grand Total 201.5591667 201.367 201.463125

The above tables are showing the idea about current pricing of hotels. The researcher has
considered average pricing approach. Now, if average price by brands is taken into
consideration, then it can be said that total 144 hotels were taken and there is significant
deviation in terms of brand. The same is also can be found after cross checking average price
by State, average price by brand by state, average price by Location and average price by
brand by location. All these tables have shown that the average price variation is negligible.
However, the researcher cannot conclude anything regarding price variation. This can be
confirmed by statistical hypothesis testing.
Issue 2: Whether price differentiation exists among the
accommodation brands
Let u1 = average weekly rate for Resort brand
u2 = average weekly rate for Cottage brand
u3 = average weekly rate for Classic brand
H0: u1 = u2 = u3
H1: at least one u is different
From the given ANOVA table performed in PHstate, it can be said that p <0.05. It means null
hypothesis is rejected.
In other words, it can be said that the price differentiation is exists between u1 and u2.
Issue 3: Whether price differentiation exists between states
among the accommodation brands
Let H0: Average price among the accommodation brands by states are not different;
H1: Average price among the accommodation brands by states are different;
Here, D1 = 3
D2 = 3*3*(16-1) = 135
Q = 3.356 + (135-120)*(3.335-3.356)/(240-120) = 3.35338

Thus, Cr = 3.35338*(8.2602/(3/3))^(1/2) =9.6378
Now if we take example of 1st and 2nd factor, |x1-X2| = 2.1131 <9.6378
So it means different.
Hence, alternative hypothesis would be selected over here.
Issue 4: Whether price differentiation exists between locations
among the accommodation brands
Let H0: Average price among the accommodation brands by states are not different;
H1: Average price among the accommodation brands by locations are different;
Here, D1 = 3
D2 = 3*2*(24-1) = 138
Q = 3.356 + (138-120)*(3.335-3.356)/(240-120) = 3.35285
Thus, Cr = 3.35285*(8.2602/(3/2))^(1/2) =7.86799
Now if we take example of 1st and 2nd factor, |x1-X2| = 2.1131 <7.86799
So it means different.
Hence, alternative hypothesis would be selected over here.
Issue 5: Whether the introduction of the Comfort brand has
increased internal competition among the other accommodation
brands
Let H0: Competitions among the accommodation brands are not present because of
introduction of comfort;
H1: Competitions among the accommodation brands are present because of introduction of
comfort;
Here, D1 = 3
D2 = 3*2*(16-1) = 90
Q = 3.377 + (120-90)*(3.356-3.377)/(120-90) = 3.356

Thus, Cr = 3.356*(6.3598/(3/2))^(1/2) =6.91032
Now if we take example of 1st and 2nd factor, |x1-X2| = 2.1131 <7.86799
So it means different.
Hence, alternative hypothesis would be selected over here.
Conclusion
Thus, to conclude, it can be said that even though there exists a small differences are there in
average price of accommodations across locations, states and by brands, the analyst has
found one important aspect is that the branding, comfort and availability has largely
influenced the price level.

Bibliography
Siegel, A., 2016. Practical business statistics. Academic Press.
Gupta, K.R. and Gupta, M.P., 2017. Business statistics. Atlantic Publishers & Distributors.
Anderson, D.R., Sweeney, D.J., Williams, T.A., Camm, J.D. and Cochran, J.J.,
2016. Statistics for business & economics. Nelson Education.
Rhodes, C., 2015. Business statistics. Briefing paper, 6152.