The exploration of hotel reference prices under dynamic pricing scenarios and different forms of competition

The reference price, used by consumers to evaluate market prices, has tremendous relevance in dynamic pricing. Reconciling current heterogeneous theories and studies on reference prices, this paper analyzes the impact of hotel price sequences on consumers’ reference prices through a lab and a field experiment. Experiment 1 tests the importance of retrospective price evaluations, while Experiment 2 evaluates the impact of three forms of competition: (i) simultaneous behavior, where firms adjust prices simultaneously; (ii) leader–follower behavior, where one firm acts as the leader; and (iii) independent behavior, where each player takes its rival's strategy as given and seeks to maximize its own profits. The results show that consumers decrease their reference price when competing hotels adjust their prices simultaneously. Relevant managerial implications are drawn for the hospitality industry, which is affected by the presence of online travel agencies that announce the daily rates offered by each competitor.     

Price determinants of sharing economy based accommodation rental: A study of listings from 33 cities on Airbnb.com

The advent of the “sharing economy” challenges not only the business of hotel industry but also the theories and models based on the conventional hotel industry. A key dimension of the hospitality industry is pricing. The aim of this study is to identify the price determinants of sharing economy based accommodation offers in the digital marketplace. Specifically, a sample of 180,533 accommodation rental offers in 33 cities listed on Airbnb.com is investigated using ordinary least squares and quantile regression analysis. Twenty-five explanatory variables in five categories (host attributes, site and property attributes, amenities and services, rental rules, and online review ratings) are explored for the intricacies of the relationships between pricing and its determinants.     

Effect of consumer sentiment on hospitality expenditures and stock returns

Given the importance of consumers to the U.S. economy and especially to the hospitality industry, we explore how consumer sentiment (i.e. confidence in the economy) affects consumption expenditures and stock returns in the hospitality industry.We find that not only does consumer sentiment partly predict changes in future consumption expenditures, but changes in consumer sentiment are contemporaneously related to hospitality industry stock returns. More importantly, our results indicate that changes in consumer sentiment can partly predict changes in stock prices of hospitality firms, an indicator of firm performance. The predictive ability of consumer sentiment can thus be useful to managers in business forecasting, planning, and strategizing for profit maximization.     

Zero price effect on hotel demand: Evidence from a discrete choice experiment

A Choice Experiment is employed to analyze the effect of a free night promotion on hotel demand in the setting of a relatively underdeveloped area in China. Results from Error Components models show evidence in favor of a non-rational “zero price effect” (ZPE): with total price and all other aspects equal, people tend to choose the hotel which offers one free night. In addition, free pricing is shown to have stronger effects in diverting preferences than a trivial price (1 RMB). However, it is not the only successful psychological pricing strategy; its effects do not significantly differ from those of a materially equivalent discount. Building upon recent methodological innovations using Choice Experiments to study pricing strategy, this paper is the first to extend the technique to study the ceteris paribus ZPE. Our findings can help hotels make use of the ZPE to attract consumers.     

Price placebo effect in hedonic consumption

Given the widespread use of premium pricing strategies as a marketing practice, how consumers evaluate premium pricing actions is an interesting issue for both marketing researchers and practitioners. Thus, the objective of this study was to examine perceptions of premium prices and the role of prices, which act as a cue that improves consumers’ experiences in an upscale café setting. Indeed, the results indicated that both price–quality schema and prestige sensitivity were significant factors that induce a positive overall perception of quality at luxury cafés, including coffee, service, and atmosphere. Thus, this study evidences that a price placebo effect exists in hedonic consumption settings. To better understand consumers’ mental accounting based on their income source, the study examined the moderating effect of the origin of the respondents’ income as well. The results revealed that the price tag generates positive consumer responses to café quality.     

Effect of Price Change Alert on Perceptions of Hotel Attribute-based Room Pricing (ABP) versus Traditional Room Pricing (TRP)

Aside from marketing information on traditional room rates, hotels and online travel agents (OTAs) are trying a new pricing technique based on the attributes of guestrooms. This research investigates how attribute-based room pricing (ABP) differs from traditional room pricing (TRP) in influencing consumer reactions when consumers receive a price change alert before (vs. after) sales. Through a series of experiments, we found that TRP and ABP result in similar alert attitude, brand attitude, and visit intention for presale price change alert. However, ABP leads to more favorable results for postsale price change alert. We examined the underlying mechanism and found that perceived fairness mediates the effect of pricing strategy on brand attitude, price alert attitude, and visit intention for postsale alert only. This research provides hotel managers and OTA marketers with guidance on when to send either type of price change message to consumers.     

The Influence of Service Quality on the Positioning of Five Star Hotels—The Case of the Lisbon Area

Abstract

Tourism in Portugal has expanded very rapidly over the last decades. At present, it accounts for about 8% of the GDP and directly employs more than 300,000 people. The growing numbers of arrivals in Portugal have also led to a rapid expansion of the hotel industry. However, this expansion has been followed by some worrying drops in the occupancy rates of five star hotels. Fierce competition has then become one of the cornerstones of the Portuguese hotel industry. Research conducted in the field of market positioning has highlighted the importance of understanding the preferences attributed by consumers to a given product (“perception”) and how and why products and services are evaluated and purchased. Based on research conducted recently among tour operators and business companies, this paper will look at the way in which service quality influences the positioning of five star hotels. The analysis and conclusions presented in the paper offer grounds for discussion about the way in which five star hotels located in the Portuguese capital and in the surrounding area may improve their image, attract larger numbers of tourists and, as a result of this, prepare themselves for growing competition that has developed in Lisbon and its outskirts. Some of the findings are applicable to other European capitals.     

Assessing holiday satisfaction of Australian travellers in Vietnam: An application of the HOLSAT model

The hotel business model has been diversified in response to the various needs of consumers. Many previous studies focused on the alteration factors of the hotel business model from the consumer's point of view. Although it is one of the factors that affect alteration of the hotel business model, the manager's perspective is also an important alteration factor. This article emphasizes that it is necessary to consider not only the consumer side, but also the management side based on two approaches of the strategy theory: the positioning approach and the resource-based approach.

Surveys were conducted by mail in order to gather information regarding what managers in Japan consider to be important components of a hotel. As a result, “location” was found to be the most important component, followed by “annex facilities” and “deployment system”. Once the components were ordered according to their relative importance, a strong relationship was found between the managers' preferences and the characteristics of “syukuhakusyutai-type” hotels, which are ‘direct management’ (DM) hotels located usually in the city. In Japan, the number of “syukuhakusyutai-type” hotels has recently increased, therefore capturing the spotlight in the hotel industry. However, the results of this research are not compared with those of much previous research conducted on hotel choice attributes, because the measured variables differed significantly.     

Dealing with pandemics: An investigation of the effects of COVID-19 on customers’ evaluations of hospitality services

The hospitality industry is highly vulnerable to pandemics. However, little is known about how pandemics alter travelers' evaluations of hospitality services. Therefore, this study investigates the changes in travelers' expectations and perceptions of hotel services during different stages of the novel coronavirus 2019 (COVID-19) pandemic. 98,163 Chinese hotel reviews were collected and scrutinized via text mining and sentiment analysis techniques to derive new implications for service optimization. The results reveal shifts in consumers’ evaluations well beyond hygienic requirements. Insights obtained from this research can help guide hospitality practice in organizing its priorities during acute pandemic situations and adjusting to possibly longer-lasting shifts in consumer preferences.     

The Relationships between National Identity,Hospitality, and Satisfaction among Foreign Hotel Guests

The main objectives of this paper are to examine the effect of hotel hospitality on the satisfaction level of foreign guests in the context of the hotel industry, as well as to explore the moderating effect of national identity (country-specific hospitality) on the relationship between hospitality and guests’ level of satisfaction. In this study, “national identity” refers to the distinctive cultural elements of a specific country that are incorporated into the hotel’s service design. This study, involving 315 foreign guests at Malaysian hotels, used survey administration as the main data collection method. Hierarchical moderated regression analysis was performed and statistical support for the effect of hospitality on the patrons’ satisfaction with their hotel stays, as well as the moderating effect of national identity on satisfaction levels, were found. This study also proposes a new scale to measure “country-specific hospitality”.     

An Empirical Approach to Identifying Cross-Cultural Modifications to International Hospitality Industry Sales Training

Abstract

This study uses six of Wilson's (1995) “success” variables in long-term buyer-seller relationship development to analyze whether relationship marketing concepts can be applied globally in hospitality sales training programs. It looks at the cross-cultural differences that exist between various regions of the world (i.e., North America and Asia) in the way buyer-seller relationships are perceived by hotel salespersons. This study found differences in the importance given to the “success” variables do exist across international boundaries. Recognition of the differences can provide assistance to hospitality industry marketers in designing and modifying sales training programs focused on developing long-term buyer-seller relationships.     

酒店动态定价背景下的顾客情绪与购后行为研究 ——基于在线评论的证据

当前,酒店受收益最大化的驱使,透过电商平台更加频繁地对价格进行动态调整,而借助互联网,顾客获取价格信息的渠道也越来越多,对价格歧视的感知更明显,动态定价策略势必会对顾客情绪和购后行为产生影响。因此,以携程旅行网3256条酒店在线评论为分析文本,运用内容分析法中的词频分析、情绪分析以及社会语义网络分析进行研究。词频分析结果显示高频词集中于动态定价类、情绪类以及顾客行为类;情绪分析结果显示顾客情绪中消极情绪占据主导地位,其次是积极情绪,最后是中性情绪;结合编码方法总结出顾客购后行为有:自我保护、报复、顾客忠诚、利他四类;社会语义网络分析中顾客对动态定价总体表现出“核心层—次核心层—边缘层”的层级结构。最后根据研究结论,文章提出了相应的管理建议。     

Tourists’ willingness to pay for an accommodation: The effect of eWOM and internal reference price

Understanding the determinants of consumers’ willingness to pay (WTP) is an important challenge especially for practitioners. This study evaluates the effect of external information (eWOM valence and volume) and internal information (internal reference price) on consumers’ WTP for an accommodation. The results of an online experiment (n = 766) show a direct effect of valence on WTP which is strengthened by both volume and the internal reference price. Consumers with high reference prices are more sensitive to the effect of an increase in valence. Moreover, internal reference price has a non-linear influence on WTP. The findings suggest the relevant role of eWOM as well as internal reference price in determining consumers’ WTP. The inclusion of these two variables in dynamic pricing strategies could lead to greater benefits for hospitality managers.     

Star rating and corporate affiliation: their influence on room price and performance of hotels in Israel

The purpose of this paper is to ascertain whether and how star rating and corporate affiliation, as signals of quality, influence pricing decisions of hotels in Israel in various geographical locations, each with its specific market characteristics and during two different periods in which the business environment suffers from a crisis due to the political circumstances in the Middle East. The data suggests that the star-rating system, which is traditionally used to rate hotels’ quality, is a still stable and consistent predictor of room prices. However, in light of the increased usage of brand names in the Israeli industry, it was found that the ability to charge and receive a premium for the hotel corporate affiliation or brand name is not consistent. The analysis presents the case in which a premium for brand name is eroded by the influence of the crisis, by the level of corporate intensity in the region, and also by the relative strength of consumers in the different geographical locations.     

Strategic and tactical price decisions in hotel revenue management

Dynamic pricing techniques allow using a number of variables in a tactical way compared to standard catalogue prices. This study merges in a conceptual model the relevance of the tactical and the strategic dimension of these variables, classified according to their tangible, reputational or contextual nature.To empirically validate the hypotheses, a database of 21.596 price observations was retrieved from booking.com. The study presents a hedonic price function, using the Shapley-Owen decomposition of the R-squared to elicit the importance of each group of factors. Further, a hierarchical cluster analysis measures the presence of heterogeneity across operators.The results show that online reputation is gaining importance over the traditional star rating. Despite the tangible variables remain of paramount importance, the findings suggest the relevant role of contextual variables in short-run price variations. The players operating in the tourism and hospitality industries should integrate these findings when designing pricing strategies.     

Exploring the Relationships Between Hotel Management Courses and Industry Required Competencies

ABSTRACT

Recently, higher education in Taiwan for the hospitality industry has grown dramatically. However, hospitality education is still considered a relative newborn in comparison with other programs. To develop effective programs, it would be appropriate to investigate competencies that influence career success in the hotel industry and the courses that nurture those important competencies.

A researcher-developed survey instrument was used to collect data from 200 industry professionals. Instrument reliability and validity were reported. The results revealed the competencies relating to communication and adaptability most influenced career success. Moreover, Finance/Marketing/Personnel Management, Foreign Languages, and Communications & Quality Management curriculum dimensions were significantly related to competencies of “communication skills & adaptation to environmental changes.”     

Studies in Tourism and Hospitality Management

Abstract

Universities around the world are involved in dynamic change as they seek creative solutions in response to a number of educational and structural issues. To be effective, educational methodologies and technologies need to be anchored to the diverse material circumstances characterising different groups of learners. The challenge for universities offering programs of study in tourism and hospitality management is to provide avenues for learning which are reflective of the needs of industry and incorporate the technology now available. One of the more significant responses has centred on the development of educational programs for flexible learning.

This paper is an analytical reflection on the experience of redesigning and developing programs in tourism and hospitality to increase student access to a wide variety of stimulating learning resources and delivery media. In particular, it documents the process of developing, teaching and evaluating a subject entitled, “Asian Cultures in Tourism and Travel” within a three-year Bachelor of Business program that offers concentrations in Tourism, Travel, Hospitality and Leisure Management.     

The power of design: How does design affect consumers’ online hotel booking?

Emphasizing experiential appeals to consumers through design is most notable in the emerging lifestyle hotel segment of the lodging industry. This study identifies which lodging design mechanisms evoke consumer responses and provides a novel understanding of the relationships among consumer perception of hotel product/service design and booking intention by incorporating consumer emotional arousal and quality expectations in a theoretical model. The findings of this study suggest that aesthetics and symbolism in hotel design shape booking intention through emotional arousal and quality expectation. The functional dimension of design affects booking intention only through quality expectation. The findings will be particularly meaningful to the lodging industry because online booking requires both emotional and cognitive responses on the part of consumers.