Strategic consumer behavior in online hotel booking

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Abstract

This study investigates strategic consumer behavior in online hotel booking. Free cancellation policies enable consumers to rebook the hotel room at a later time should the price drop prior to the date of stay. A discrete choice experiment is used to infer consumer preferences for free cancellation and non-refundable rates under different scenarios. The study also examines the moderating role of the risk attitude of consumers. Risk-seeking consumers show preference for a free cancellation rate that increases with the availability of an automatic rebooking service. Although a higher booking window increases the utility of the free cancellation rate, such impact decreases as risk propensity increases. The identification of four distinct consumer segments provides clear implications for industry practitioners.
Original languageEnglish
Article number102947
JournalAnnals of Tourism Research
Volume83
Early online date27 May 2020
DOIs
Publication statusPublished - 1 Jul 2020

Keywords

  • Strategic consumer
  • Online hotel booking
  • Dynamic pricing
  • Hotel rebook
  • Risk attitude
  • Discrete choice modeling

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