Hence, despite the decreasing values of hotel prices, the market power can still be strengthened through the use of advertising strategy (Tung et al., 2010).
The market power of hotel industries has gained an incremental value especially when hotel management lowered down their room rates. Celen and Thomas (2009) implicated that the changes of the market power within hotel industries are increasing towards a better profit because lowered priced rooms are mostly booked and occupied. In addition, Eden (1990) and Dana (1999) explicated that hotel industries can gain a change in market power when the distribution of room rates is equal and lowered to an affordable price. Consequently, market power is important within hotel industries in order to cope up with the increasing industrial competition (as cited in Celen & Thomas, 2009).
Accordingly, the market power is determined through the market structure of the hotel industry, in which this will influence the changes of the market power held by the particular firm. Moreover, the vertical integration can benefit the market power of hotel industries and be able to manage their services despite increasing competition. Hence, the market power depends on how the hotel industries market their low priced rooms in order to sustain and regulate their market structure (Celen & Thomas, 2009. Tung et al., 2010).
Tung, G.-S., Lin, C.-Y., & Wang, C.-Y. (2010). The market structure, conduct and performance paradigm re-applied to the international tourist hotel industry.