International Journal of Contemporary Hospitality Management· 2026Q1
Strategic inertia or rational caution? Unpacking short-term rental pricing responses to hotel ADR fluctuations
- 0citations
- Q1SCImago
- 2026year
Short summary
Short-term vacation rentals (STVRs) exhibit pricing inertia, with current hotel Average Daily Rates (ADRs) positively influencing STVR prices, while lagged ADRs show a negative, partially corrective effect, indicating a delayed response.
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Key points
- STVRs show pricing inertia, not immediate reaction, to hotel ADR changes.
- Current hotel ADRs positively associate with STVR price adjustments.
- Lagged hotel ADRs negatively associate with subsequent STVR price adjustments, indicating a delayed, partially corrective response.
- STVR density did not significantly moderate the relationship in the primary model.
AI-generated from the title and abstract; the full text is not read.
Abstract
Purpose This study aims to investigate how short-term vacation rentals (STVRs) adjust their pricing strategies in response to hotel ADRs. While prior research has emphasized the disruptive effect of STVRs on hotel performance, the reverse relationship remains underexplored. The study addresses this gap by examining whether market-level STVR price adjustments respond to ADR movements and how market conditions such as STVR density and ADR volatility shape these dynamics. Design/methodology/approach Using a balanced panel dataset of monthly observations from October 2014 to May 2022 across 16 US cities, the study applies a two-step difference Generalized Method of Moments (GMM) estimator. Key variables include STVR price adjustments, hotel ADRs, ADR volatility and STVR density, with interaction terms and lagged specifications to capture delayed and dynamic effects while addressing endogeneity and unobserved heterogeneity. Findings Results reveal significant pricing inertia among STVRs. In the primary GMM specification, current hotel ADRs are positively associated with STVR price adjustment, while lagged hotel ADRs are negatively associated with subsequent adjustment, indicating a delayed and partially corrective response. STVR density does not significantly moderate this relationship in the primary model, whereas the role of ADR volatility is more sensitive to specification in supplementary analyses. Originality/value The study extends revenue management and behavioral economics theory by highlighting delayed and asymmetric competitive interactions between hotels and STVRs. It provides market-level evidence on how STVR pricing responds to hotel ADR signals over time, offering implications for hotels, STVR operators, platforms and policymakers concerned with market efficiency and competition.
The authors' abstract, as published at the source. International Journal of Contemporary Hospitality Management, 2026 · DOI ↗
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