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Pricing in a social world: The influence of non-price information on hotel choice

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Journal of Revenue and Pricing Management Aims and scope

Abstract

Effective pricing requires an understanding of how consumers use price and non-price information in purchase decisions. In this study we use discrete choice analysis to examine how hotel consumers trade off price and three sources of non-price information – user-generated content (UGC), UGC-derived ratings and brand name – during the choice process. Although all types of information had a significant effect on hotel choice, review valence emerged as the dominant choice driver. Further, a qualitative data analysis suggests that consumers integrate price with non-price information to assess value pre-purchase, and can be swayed to a higher price if non-price data suggest a superior experience. Implications for revenue management practitioners are discussed.

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Notes

  1. Reputation score is ReviewPro’s Global Review IndexTM: calculated by analyzing the quantitative scores associated with the reviews posted on major online travel agencies and review sites (www.reviewpro.com/product).

  2. Where choice sets yielded identical attribute levels for two of the hotel properties in the set (for example, ‘Mid’ TripAdvisor rank), a second, comparable value was substituted for one of the properties (for example, a ‘Mid’ ranking of ‘72 of 217’ for the first hotel, and ‘76 of 217’ for the second).

  3. Survey Sampling International was used to gain access to consumers for this study. A general population sample was generated to meet the requirements of the study design, taking into account census region and demographics (age and gender) and typical response rates within those categories.

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Acknowledgements

This work was supported by the SAS Institute, Inc. The authors gratefully acknowledge the advice, assistance, and support provided by Warren Kuhfeld, Laura Higgins, Sue Walsh and Pamela Prentice and her team during data collection and analysis.

Author information

Authors and Affiliations

  1. The Pennsylvania State University, PA, USA

    Breffni M Noone

  2. SAS, SAS Campus Drive, Cary, NC, USA

    Kelly A McGuire

Authors
  1. Breffni M Noone
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  2. Kelly A McGuire
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Correspondence to Breffni M Noone.

Appendix

Appendix

Examples of reviews

Interpersonal, Emotional, Positive

Excellent service – we were amazed by the hospitality afforded to us from the beginning to the end of our stay. Especially pleased with the front desk staff!

Interpersonal, Emotional, Negative

All I can say is that we were not at all happy with the staff at this hotel. We were totally irritated by the staff at the front desk – somebody needs to teach them the meaning of service!

Interpersonal, Descriptive, Positive

Check in took no time at all. The front desk agent offered helpful advice on local attractions and made restaurant recommendations that fit exactly what was needed.

Interpersonal, Descriptive, Negative

The staff was not informative or attentive. After waiting 10λmin for the front desk agent, he could not give simple directions to local attractions, and answered the phone twice while giving the directions.

Servicescape, Emotional, Positive

We stayed here last week. We were extremely pleased with the size of our room. It was exactly as we had hoped for. Very peaceful, especially at night, which really made us happy! We loved that we could get the temperature just right!

Servicescape, Emotional, Negative

In a word, noise! I did not feel at all relaxed. I was terribly unhappy with the bed. I got frustrated when I couldn’t get the temperature right – and I was very irritated by the lighting!!

Servicescape, Descriptive, Positive

The room was spacious – king bed, nice big seating area and a large desk. The lighting was set up very well – bright for working, but could be dimmed when it was time to relax. Temperature could be adjusted to accommodate any preference.

Servicescape, Descriptive, Negative

The sheets and blankets that were on the bed were so thin. The room was cold and drafty, and the heat didn’t work properly at all. Dark and gloomy – even with the lights on.

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Noone, B., McGuire, K. Pricing in a social world: The influence of non-price information on hotel choice. J Revenue Pricing Manag 12, 385–401 (2013). https://doi.org/10.1057/rpm.2013.13

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