The impact of discount policy on hotel pricing in a competitive market after Covid-19 using game theory

This paper presents an optimization model for hotel pricing in the competitive environment following the Covid-19 epidemic, in which the government intervenes by offering appropriate tariffs and hotels use incentive policies such as discounts to attract customers. we consider the government as the leader and the hotels as the followers of the Stalkberg model, then apply the Nash equilibrium to determine the optimal price and demand of hotels in competitive conditions, taking into account the discount. By considering a government utility function, the optimal level of government tariffs is determined. The results indicate that government intervention in the tourism industry includes measures that benefit tourism. Because the government can increase the hotel revenue and expand tourism in favor of hoteliers by reducing its profits. Extensive analysis has been performed on five-star, four-star, and three-star hotels in a tourist area in Iran, and some of the most important managerial insights have been explained.