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The more, the merrier? Understanding how travel frequency shapes willingness to pay

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The more, the merrier? Understanding how travel frequency shapes willingness to pay. / Nieto-Garcia, Marta; Muñoz-Gallego, Pablo A.; González-Benito, Óscar.

In: Cornell Hospitality Quarterly, 19.01.2020.

Research output: Contribution to journalArticlepeer-review

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Nieto-Garcia, Marta ; Muñoz-Gallego, Pablo A. ; González-Benito, Óscar. / The more, the merrier? Understanding how travel frequency shapes willingness to pay. In: Cornell Hospitality Quarterly. 2020.

Bibtex

@article{bd5186d14aca486c8b6ab3332e82938d,
title = "The more, the merrier? Understanding how travel frequency shapes willingness to pay",
abstract = "Customers{\textquoteright} 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{\textquoteright} 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{\textquoteright} 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{\textquoteright} travel frequency and integrating it into dynamic pricing models will create a better alignment of room rates with travelers{\textquoteright} WTP, which will make revenue management techniques more customer-centric and, ultimately, enhance profitability.",
keywords = "willingness to pay, travel frequency, reference price, dynamic pricing, instantaneous indirect effect, room rates",
author = "Marta Nieto-Garcia and Mu{\~n}oz-Gallego, {Pablo A.} and {\'O}scar Gonz{\'a}lez-Benito",
note = "Author(s), Contribution Title, Journal Title (Journal Volume Number and Issue Number) pp. xx-xx. Copyright {\textcopyright} [year] (Copyright Holder). DOI: [DOI number].",
year = "2020",
month = jan,
day = "19",
doi = "10.1177/1938965519899932",
language = "English",
journal = "Cornell Hospitality Quarterly",
issn = "1938-9655",
publisher = "SAGE Publications Inc.",

}

RIS

TY - JOUR

T1 - The more, the merrier? Understanding how travel frequency shapes willingness to pay

AU - Nieto-Garcia, Marta

AU - Muñoz-Gallego, Pablo A.

AU - González-Benito, Óscar

N1 - Author(s), Contribution Title, Journal Title (Journal Volume Number and Issue Number) pp. xx-xx. Copyright © [year] (Copyright Holder). DOI: [DOI number].

PY - 2020/1/19

Y1 - 2020/1/19

N2 - 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.

AB - 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.

KW - willingness to pay

KW - travel frequency

KW - reference price

KW - dynamic pricing

KW - instantaneous indirect effect

KW - room rates

U2 - 10.1177/1938965519899932

DO - 10.1177/1938965519899932

M3 - Article

JO - Cornell Hospitality Quarterly

JF - Cornell Hospitality Quarterly

SN - 1938-9655

ER -

ID: 16986143