The more, the merrier? Understanding how travel frequency shapes willingness to pay
Research output: Contribution to journal › Article › peer-review
Customers’ evaluation of hotel prices has received increasing attention in hospitality research. Beyond the specific attributes of the offer, internal norms related to prior experiences affect customers’ response to price. Drawing on the behavioral price literature, this study investigates the effect of travel frequency and reference price on the formation of travelers’ willingness to pay (WTP) for accommodation. The study presents a novel methodological approach introducing the concept of instantaneous indirect effect. Results offer support for an inverted U-shaped relationship between travel frequency and WTP, mediated by the internal reference price. WTP reaches its peak when the customer has booked an accommodation six times in the past two-year period. The findings provide clear implications for practitioners. Monitoring customers’ travel frequency and integrating it into dynamic pricing models will create a better alignment of room rates with travelers’ WTP, which will make revenue management techniques more customer-centric and, ultimately, enhance profitability.
Original language | English |
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Number of pages | 15 |
Journal | Cornell Hospitality Quarterly |
Early online date | 19 Jan 2020 |
DOIs | |
Publication status | Early online - 19 Jan 2020 |
Documents
- GARCIA_2019_cright_CHQ_The more the merrier - Understanding how travel frequency shapes willingness to pay
Rights statement: Marta Nieto Garcíaa, Pablo A. Muñoz Gallegob, Óscar Gonzalez Benitoc, 'The more the merrier? Understanding how travel frequency shapes willingness to pay.' Cornell Hospitality Quarterly. Ahead of print. Copyright © 2019 The Author(s). https://doi.org/10.1177/1938965519899932.
Accepted author manuscript (Post-print), 454 KB, PDF document
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