Hotel attributes: Asymmetries in guest payments and gains – A stated preference approach

This paper reports the existence of asymmetries in the preference formation of potential guests with regards their perception of hotel attributes. In the same way, using choice experimentation, we can confirm that similar asymmetries exist in their willingness to pay measures based on the valuation of losses or gains. The specification of a reference dependent utility function allows the application of prospect theory to an analysis of choices made by consumers when they evaluate attributes that define hotel service quality. The results show the existence of significant discrepancies between the monetary compensation a customer would accept if a reduction in hotel quality was produced and the amount he/she would be willing to pay if the service quality were improved. The results imply important implications and recommendations for hotel managers and policy makers.     

Service Quality and Customers' Willingness to Pay More for Travel Services

Abstract

Increasingly sophisticated and price conscious consumers have combined with forces of globalisation and electronic commerce to create new challenges for travel agents. To maintain efficiency and profitability, travel agents need to know the links between service quality and customers' willingness to pay more (WTPM). These links are explored through measuring customer perceptions (N = 122) of service quality, loyalty and WTPM. The results revealed firstly that while many consumers were able to pay more for travel services, fewer were willing to do so. Secondly, overall service quality and its underlying dimensions were positively associated with selected WTPM items. These findings support and extend previous studies on the service quality-behavioural intentions link and provide practical implications for the travel industry in relation to a differentiated price and service strategy.     

Measuring Personal Service Quality

Abstract

This study examined the personal service quality of international tourism hotels in China by measuring international hotel customer's satisfaction level and their perceived importance evaluation of personal service attributes. Six international hotels in Beijing and three departments (reception, food and beverage, and housekeeping) in each hotel were selected in this study. Responses from 472 customers were used for the data analysis of this study. It was found that customers identified friendliness and willingness to provide service in all three departments as service attributes with which they were very satisfied. Foreign language ability was identified as the least satisfactory in the reception and food and beverage departments. Customers also regarded friendliness and willingness to provide service as very important.     

Asymmetric price responses to hotel competition caused by heterogeneous customers’ willingness to pay

Heterogeneous customers’ willingness to pay affects hotel competition and results in competitors’ asymmetric price responses. To study this lopsided effect, we construct a game framework featuring an upscale hotel and an upper-midscale hotel under a series of assumptions. We first analyze hotel pricing and competitor price responses and then compare the competitors’ responding adjustments. Primary findings show that (1) the price response expressed as an amount by the upscale hotel is more than that of the upper-midscale hotel, and that (2) the price response expressed as a percentage by the upscale hotel is less than that of the upper-midscale hotel. Finally, we present reasons for our findings and offer suggestions to hotel revenue managers.     

Do Blue Flag promotions influence tourists’ willingness to pay a price premium for coastal destinations?

The Blue Flag is a popular eco-label in tourism. This study aims at examining the effectiveness of Blue Flag promotion on tourists' willingness to pay a price premium to coastal destinations via two online experiments. Study 1 shows (n = 152) that the Blue Flag stimulates higher willingness to pay a price premium for coastal destinations directly as well as indirectly through self-congruity and destination brand identification. Study 2 (n = 160) used a new sample to enhance external validity and generalizability of the Study 1 findings. Study 2 shows that destination brand quality and destination brand identification serially mediate the effect of Blue Flag promotions on the tourist's willingness to pay a price premium. The findings suggest that destination managers should deploy the Blue Flag Logo in destination promotions to enhance self-congruence, destination brand identification, perceived destination quality, and the tourist's willingness to pay a price premium.     

Cross-Cultural Service Encounters in the Hospitality Industry and the Effect of Intercultural Sensitivity on Employee Performance

Abstract

Foreign visitors are such important contributors to the American economy that tourism officials are working hard to reassure them that the U.S. is still a safe place to visit. The significant increase in foreign visitors over the past decade caused U.S. scholars to pay more attention to the unique challenges of cross-cultural service encounters. This exploratory study adds to that trend by attempting to measure the effect of intercultural sensitivity on the performance of hospitality employees in cross-cultural service encounters. The results indicate that employees with high intercultural sensitivity scored significantly (p < .05) higher on measures of service attentiveness, revenue contribution, interpersonal skills, job satisfaction, and social satisfaction as they relate to cross-cultural encounters. There was no significant difference in scores for motivation-to-work, job tenure, and primary rewards (compensation, recognition, etc.).     

Does offering an organic food menu help restaurants excel in competition? An examination of diners’ decision-making

This study aims to examine whether the presence of an organic food menu can positively influence diners’ decision-making. A 3 (restaurant segment: quick service vs. casual dining vs. fine dining) by 2 (price discrepancy between competing restaurants: small vs. large) scenario-based experiment was conducted with 405 U.S. consumers. MANCOVA results indicate that using organic ingredients offers a greater advantage for the quick-service segment regarding perceived food quality, attitudes towards the restaurant, and willingness to select, compared to casual and fine dining segments. The magnitude of a premium price of organic ingredients negatively influences such advantage in the process of consumers’ decision-making. When a large (vs. small) premium price is charged for using organic ingredients, customers’ preferences for the restaurant (over its rival) significantly drops to such an extent that customers are more willing to choose the competitor (i.e., rival restaurant with a conventional menu). Discussions and implications are further elaborated.     

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.     

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.     

How psychological and contextual factors contribute to travelers’ propensity to choose green hotels?

Despite the growing popularity of green hotels, there remains a dearth of research examining travelers’ intentions to choose green hotels. The study addresses this research gap by developing and testing an integrated model of green hotel behavior in an emerging market of India. We use a sequential approach of SEM and fuzzy set qualitative comparative analysis on 347 responses collected from Indian travelers to gain a more in-depth understanding of the role of biospheric value, green trust, willingness to pay premium, attitude, subjective norms, and perceived behavioral control in determining green hotel intentions. The findings show that presence of green trust is a significant and necessary condition for green hotel choice. Additionally, absence of willingness to pay premium, biospheric value, attitude, and subjective norm were found to deter travelers from choosing green hotels. These findings offer unique insights for managers in developing marketing strategies to enhance travelers’ green hotel adoption.     

Millennials’ willingness to pay for green restaurants

The hospitality industry is currently witnessing an increase in the number of restaurant companies with sustainable business models. This research explores the determinant factors of millennials’ willingness to pay (WTP) by looking at the qualitative decision of whether to pay more and the quantitative decision of how much extra to pay. While literature has investigated the factors that lead people to choose green restaurants, no analysis that simultaneously considers the qualitative and quantitative decisions has been conducted for the millennial generation. This study fills this gap by estimating the Heckit model, which (1) allows us to simultaneously model both decisions and detect their determinants—“green consumerism,” “health consciousness,” “income,” and two psychographics (“green restaurant preference” and “predisposition to make an effort in terms of time and distance”)—and (2) permits the control of sample selections bias, which turns out to be a critical issue in this research.     

Influence of sustainable hospitality supply chain management on customers’ attitudes and behaviors

This study aims to identify the impact of the environmental, social and economic dimensions of sustainable hospitality supply chain management actions on customers’ attitudes and behaviors including satisfaction, loyalty and willingness to pay a premium for sustainable hospitality goods and services utilizing data collected from U.S. consumers who frequently stay at hotels. Findings suggest that while both environmental and economic dimensions’ actions of sustainable hospitality supply chain management have positive influences on customer satisfaction, loyalty and willingness to pay a premium for sustainable hospitality goods and services, the social dimension actions are found to have a positive influence on customer satisfaction and a negative influence on customer willingness to pay a premium. Results also indicate that customer satisfaction fully mediates the relationship between social dimension actions and customer loyalty. In addition, customer satisfaction positively influences customer loyalty, which ultimately increases customer willingness to pay a premium. The implications of the research findings are provided.