Can setting hotel rate restrictions help balance the interest of hotels and customers?
International Journal of Contemporary Hospitality Management
ISSN: 0959-6119
Article publication date: 5 August 2014
Abstract
Purpose
The purpose of this study is to assist hoteliers to design hotel rate restrictions that are in the interest of hotels and of customers, under the joint influence of room rates and rate fences.
Design/methodology/approach
This study used a questionnaire as the data collection instrument. Conjoint analysis was applied to examine customers’ preferences regarding hotel rate fences.
Findings
The results indicate that refundability, price and advance requirement, in that order, are identified as the most important attributes in the overall decision-making process of customers. Changes allowed and rule type are comparatively less important attributes.
Research limitations/implications
This study extends the hotel revenue management literature by examining customer preferences for hotel rate restrictions based on their socio-demographic characteristics and travel behavior. This study also illustrates the usefulness of conjoint analysis in determining the utility values of hotel-room rates and rate fences.
Practical implications
The findings of this study may help professional hoteliers to better understand customers’ decision-making process and underlying needs, thus helping them to design attractive rate fences that are in the interests of both hotels and customers.
Originality/value
This study is the first to investigate customer preferences regarding hotel rate restrictions based on demographic and travel behavior information. The identification of these preference values should help hoteliers to identify the decision-making processes and needs of customers.
Keywords
Acknowledgements
The authors would like to thank the four anonymous reviewers and guest editors for providing constructive comments on earlier versions of this paper. This project was supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project Number: PolyU 542811).
Citation
Denizci Guillet, B., Liu, W. and Law, R. (2014), "Can setting hotel rate restrictions help balance the interest of hotels and customers?", International Journal of Contemporary Hospitality Management, Vol. 26 No. 6, pp. 948-973. https://doi.org/10.1108/IJCHM-01-2013-0020
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited