Differentiation of cancellation policies in the U.S. hotel industry

Hotel cancellation policies not only generate revenues but also affect consumers’ reservation behaviors. The objective of this study is to develop the typology of hotel cancellation policies with regard to cancellation fees and deadlines. A nationwide survey of cancellation policies was conducted in order to understand the cancellation policies that are practiced in the U.S. hotel industry. Multiple correspondence analysis was used to spatially map cancellation policies with fees and deadlines, followed by a two-step cluster analysis identifying hotel segments. The results indicate that U.S. hotels could be grouped into two mutually exclusive segments. Each of the hotel segments possesses unique characteristics. This study shows that hotel differentiation is important in setting cancellation policies.     

Differences Between Management Philosophies Among American and Chinese Hotel Managers: A Cultural Comparison Between Las Vegas and Shanghai

The aim of this study is to ascertain, in an international tourism context, whether there are cultural discrepancies between hotel employees who have been educated and trained in a host country, and guests who have traveled to that country, given that each group is imbued with their own national culture. The findings indicate that not only do Thai frontline hotel employees have different expectations about the behavior of Japanese and Korean customers, but that the expectations of both customer groups concerning their own behavior differ from those of Thai employees. A significant gap was found in perceptions of actual behavior between the international customers and hotel staff, suggesting that cultural discrepancies are indeed present, but also vary by ethnicity. The scale of the discrepancy between Thai employees’ perceptions of Japanese tourists’ behavior, for example, was larger than in the case of the Korean customers. Comparison of the expectations of the two international customer groups also revealed strong differences.     

Determining guests’ willingness to pay for hotel room attributes with a discrete choice model

Hotel managers need to understand the marginal utility customers associate with a specific attribute of a hotel in order to effectively set up rate fences and to price their rooms accordingly. This study adopted a stated choice experiment and discrete choice modeling method to obtain hotel guests’ willingness to pay (WTP) for a specific set of room attributes within a single hotel property. The attributes include room views, hotel floor, club access, free mini-bar items, smartphone service, and cancellation policy. The study discovered that leisure travelers versus business travelers, and first-time visitors versus repeat visitors, perceive different WTP values for various attributes. These findings provide valuable information for hotel managers to segment their market and conduct revenue management practices in order to maximize revenue and profit. The results also demonstrate the value of discrete choice modeling in obtaining WTP for hotel room attributes.     

我国酒店在线预订价格竞争的实证研究

在线旅行预订已经成为消费者日益青睐的旅游产品消费模式，其中酒店的在线预订增长量尤其明显。目前在酒店在线预订市场中，既有旅行在线代理商也有酒店官网，且两者竞争越来越激烈。这两种主要的酒店在线预订其价格有没有显著性差异？不同类型酒店差异表现是否一致？文章借用配对样本￡检验方法对我国酒店在线预订价格竞争进行实证研究，深度剖析两种在线预订渠道的定价规律及形成原因，并提出相关建议。     

Analyzing Hotel Customers' E-Complaints from an Internet Complaint Forum

SUMMARY

Recent web technology advancement has enabled online customers to express their concerns and negative experiences about the hotel services over the Internet. This exploratory study attempts to provide some insights into this recent phenomenon by analyzing self-selected hotel customers' online complaints recorded on a specialized complaint forum, eComplaints.com. A content analysis of those e-Complaints in 18 problem categories revealed that online customers were mostly unhappy with fundamental service failures (i.e., declined service quality and rude employees) in the hotel service encounter. Surprisingly, only one in every five e-Complaints received a response from the hotel company in the identified top-five complaint categories. The authors further used text-mining software to identify most frequently complained keywords and examine their relational associations. Business implications of the research findings were also discussed.     

Relationship between customer complaint behavior and demographic characteristics: A study of hotel restaurants' patrons

This study documented customer complaint behavior in hotel restaurants in Deadwood, USA, and examined the relationship between complaint behavior and demographic characteristics. The sample consisted of 250 hotel restaurant customers. It was found that the hotel restaurant customers tended to complain privately rather than taking public actions. Older, well-educated, customers with higher incomes tended to take private action to complain about their dissatisfaction more than younger, less educated customers with lower incomes. Based on results of the study, implications were suggested for industry practitioners to diminish the negative impact of complaint on hotel restaurants.     

The Channel That Offers the Lowest Online Room Rates: A Case Study of Hotels in Hong Kong

Online distribution channels increasingly serve as platforms hotels can use to offer competitive room rates to attract price-sensitive customers and maximize yield. Capturing the lowest and highest daily room rates over a 360-day period from five of the most popular online travel agencies, and two batches of data showing the lowest room rates over 28 days from a last-minute bookings website, this study compares the lowest prices offered. The results indicate that no single online channel outperforms the others in any of the hotel star-rating categories, and that the last-minute reservation service provides the lowest hotel room rate across different star ratings.     

Prediction accuracy for reservation-based forecasting methods applied in Revenue Management

With a few notable exceptions, airlines and hospitality forecasting research has been focused so far on point predictions of customers’ bookings. However, Revenue Management decisions are subject to a much greater risk when based exclusively on point predictions. To overcome this drawback, we propose a stochastic framework that allows the construction of prediction intervals for reservation-based (pickup) forecasting methods, which are widely used in the industry. Moreover, we introduce an extension of the multiplicative pickup technique based on Generalized Linear Models. We test the proposed framework with real reservation data from a medium-sized hotel on Lake Maggiore (Italy) and we obtain more efficient prediction intervals relative to classical time series methods. Our approach can be useful to hotel revenue managers that wish to make more informed decisions, planning alternative pricing and room allocation strategies for a range of possible demand scenarios.     

Value of a hotel stay: a case study in Hong Kong

This study examines the value of a hotel stay from the perspective of hotel customers and hotel service professionals. Respondents, including hotel customers and hotel service professionals, were asked the extent of their agreement or disagreement with statements related to four different value dimensions: functional value, emotional value, social value, and customer-perceived sacrifices. Results showed that there are significant differences between the hotel service professionals’ perceived value of the hotel stay and customers’ perceived value of the hotel stay. The differences are found in social value and customer-perceived sacrifices.     

Do luxury room amenities affect guests’ willingness to pay?

Intangible services have fewer cues to enable consumer evaluation compared to physical goods. Cues are therefore particularly important for highly intangible services, since they provide tangible evidence of quality. This study explores whether luxury brand room amenities can be used as cues for customers to evaluate a hotel. This study attempts to identify what items and amenities guests find most/least useful and to examine whether luxury brand room amenities can enhance customers’ evaluation of a hotel and increase willingness to pay based on positivity bias. Wi-Fi was regarded as the most useful hotel amenity, while telephone was regarded as the least useful amenity. This study found customers willingness to pay is affected by providing luxury brand room amenities. When luxury amenities were placed in the room, customers’ estimation of the room rate and their willingness to pay for it both increased. Moreover, about two out of five expressed a willingness to pay extra for an upgrade to access luxury brand room amenities. The findings of this study provide important implications for hotel practitioners.     

Designing lifestyle hotels

Art creates irreplaceable added value and serves as a source for satisfying the spiritual needs of hotel customers. To provide customers with memorable services, hotels not only need to continue improving their services (exploit), but also have to design artistic new services (explore). Thus, customer willingness to return to the hotel could be increased, enhancing customer loyalty. However, few hotels simultaneously implement these two types of trade-off activities (i.e., exploitation and exploration). According to the ambidexterity perspective, this study applied a case study approach to investigate the process through which hotel operators design lifestyle hotels. Moreover, this study involved constructing an operational framework that adopted art as the basis for differentiation. The research results revealed that in introducing art concepts into a hotel service system, hotels operators must attach a high level of importance to several key activities, including hiring a full-time executive artistic manager in the top management team to engage in innovation, integrating local culture and the natural environment into the design of an artistic servicescape, catering to customers’ needs, and adopting high-performance human resource practices. These activities enable hotels to enhance their service capability in simultaneously implementing the two mutual trade-off activities, specifically designing new artistic services (explorative innovation) and continually improving their services (exploitative innovation).     

International hotel development: A study of potential franchisees in China

Franchising is a strategic partnership formed by the franchisor and the franchisee, and consequently partner selection between the franchisor and the franchisee is critical to the long-term success of a franchise. However, the literature has primarily taken the viewpoint of franchisors, but failed to explore the perspective of the potential franchisees. As China represents a significant growth opportunity for international hotel franchisors, this study examines the perspective of China's domestic hotel operators regarding franchising and analyzes a mix of factors that may affect such perspective. The study of 182 Chinese hotel general managers shows that China's hotel practitioners have considerable interest in franchising and are knowledgeable about the concept as it pertains to hotels. The findings indicate that the length of work experience and educational background of Chinese hotel operators may influence their franchising preferences. Hotel chains that have strong brand awareness, supportive centralized reservation systems, and offer relatively high returns on investment at relatively low franchise fees, are most attractive to potential Chinese franchisees.     

Influencing stakeholders to reduce carbon footprints: Hotel managers’ perspective

Reducing the carbon footprint is an important strategy in addressing the greenhouse effect. Some businesses in the hotel industry have started to consider implementing programmes that involve their stakeholders so that they can reduce their carbon footprints together. However, little research into how hoteliers influence their key stakeholders has been conducted. The aim of this study is to identify who hotel managers consider to be their key stakeholders and what strategies they use to encourage the stakeholders to act co-operatively. These issues are examined by taking a qualitative research approach, in which data were collected from 22 hotel executives through in-depth interviews. The findings reveal the stakeholders identified by the executives are hotel owners, employees, customers, hotels/hotel owners’ associations, governments, consultants, investors, suppliers, environmental NGOs and the wider community. The different influencing strategies used with these stakeholders are discussed.     

Can Response Management Benefit Hotels? Evidence from Hong Kong Hotels

With the growing influence of online reviews, more hotels are adopting online response management, but whether this works and benefits a hotel has rarely been studied. In this research, we study the impact of response management on hotel online ratings using data retrieved from TripAdvisor with a focus on Hong Kong hotels. We find that (1) high class hotels are more likely to adopt response management; (2) there is no significant difference among different hotel classes in terms of response rate; and (3) targeted response management has a significant positive effect on hotel ratings. In addition, Asian customers tend to give lower ratings than Western customers. We outline specific implications for hotel managers and their online management and offer suggestions for future research based on the empirical findings.     

Investigating the importance of positive hotel design

Despite customers’ attention to well-being, scant research has examined the role of positive hotel design to enhance customers’ well-being and brand evaluations. Derived from the positive design framework and Stimulus-Organism-Response model, this study investigated effects of positive design factors on customers’ responses in the context of the hotel industry. Findings from this study identified that corporate social responsibility to environment, escapism, and compatibility positively influenced customers’ well-being; whereas, only escapism and compatibility influenced self-brand connection. Both well-being and self-brand connection led to customers’ brand loyalty. Results provided suggestions to hotel managers in developing meaningful customer experiences through the lens of positive design.     

Satisfaction and positive emotions: A comparison of the influence of hotel guests’ beliefs and attitudes on their satisfaction and emotions

This research provides a comparative study of two comprehensive servicescape models to explore the underlying influence of various hotel elements on guests’ satisfaction with, and emotional responses to, their hotel stays. Based on the theory of reasoned action (TRA) and the theory of planned behavior (TPB), this research sought to identify the differences in guests’ beliefs and attitudes about the elements of hotels’ public areas, rooms, ambiance, social, and green practices in determining their satisfaction and emotions. Two structural models were developed illustrating the theorized interrelationships between identified constructs. Data collected through an online survey from 310 guests stayed in upscale hotels with four-star ratings were used for the analysis. Results from two structural models revealed that the model with attitudes is a better predictor of guest satisfaction and emotions than the model with beliefs. Further, emotionally attached guests engage more in WOM than did satisfied guests. Hotel managers need to offer experiences that consist of elements that matter to customers since customers’ attitude towards various service elements determine their satisfaction and emotional attachment with hotels. Additionally, in order to get brand promoters through WOM recommendations, hotels need to focus on emotionally attached customers than satisfied customers.     

A preliminary assessment of the function and conference service product at a UK stately home

The UK conference market is estimated to be worth £6 billion and is thought to be the fastest growing sector of the hotel industry. An increasing number of less conventional venues are aiming to attract corporate business, though most empirical research focuses on the hotel conference product. A UK stately home is the venue studied in this article. To identify possible areas for improvement, a telephone survey of customers was undertaken to assess the service and facilities. The high average ratings indicate that generally organisers have a favourable impression of the stately home. The research revealed significant differences in the average ratings given for the Main Hall and His Lordship's Apartment, the two rooms available for functions. Event category and organiser experience were not found to influence the ratings. Due to the relatively small sample size, only tentative observations are made about the trends which emerged from the analysis.     

The effect of atmosphere on customer engagement in upscale hotels: An application of S-O-R paradigm

Research suggests that atmosphere plays an important role in creating emotional connections between a hotel customer and the hotel and that these connections lead to improved customer satisfaction and customer engagement. The purpose of this research is to identify some of the atmosphere elements within a hotel that might enable customers to better engage with the hotel. A structural equation model (SEM) was employed to test the relationships. Social and room design were found to be significant antecedents to customer satisfaction. The research also found that while satisfied customers were more likely to promote the hotel to others through WOM behavior, they had fewer suggestions for improvement. Theoretical and practical implications are discussed as well.     

Globalization or localization of consumer preferences: The case of hotel room booking

The purpose of this study is to investigate potential differences in attitudes between Chinese and Western tourists towards various hotel room reservation policies. The study is meant to help the revenue managers of international hotel companies make informed choices on whether to pursue a globalized or a localized approach in the design of hotel room rates and rate restrictions. Three ranges of room prices and four types of rate restrictions are evaluated. The rate restriction policies considered are: a) rule type, b) advance requirement, c) refundability, and d) changes allowed. The results of customer surveys show that the Chinese and Western respondents do not express significantly different preferences concerning room rates, advance requirement, rule type, or refundability. They differ significantly only concerning the changes allowed policy. This result indicates that revenue managers of international hotel companies can take a globalized approach in designing rate restrictions. The identification of these customer preferences provides hotel revenue managers with empirical data on the attitudes of culturally diverse consumers, and this information can enable the design of hotel pricing policies that attract consumers in the global market.     

Do reward programs truly build loyalty for lodging industry?

Hotel brands have sought numerous ways to build the relationship with their customers. Inspired by the airlines’ success, most major hotel chains have developed loyalty programs that reward customers for repeat business. However, the effectiveness of reward programs has been questioned. To explore reward programs’ potential to alter normal patterns to behavior, this research investigates how the timing of rewards affects customer loyalty for hotels and whether the effectiveness of these reward structures is moderated by customer satisfaction. This research also examines whether customer's value perception of loyalty program truly affect brand loyalty or program loyalty. In order to test the research framework, a 2 × 2 full-factorial, randomized, between-subject experimental design was conducted. In total, 209 respondents participated in the study. The results indicate that immediate rewards are more effective in building a program value than delayed rewards. Moreover, the value of loyalty program affects customer loyalty only through program loyalty to the extent that the program provides value to the customer. Finally, satisfaction plays an important moderating role on reward timing. Delayed rewards work better than immediate rewards only if customers are satisfied with hotel experience. In contrast, the immediate rewards in the dissatisfied experience become effective in their capacity to invoke customer loyalty.