Determining guests’ willingness to pay for hotel room attributes with a discrete choice model

Masiero, Lorenzo (School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong / College of Charleston Charleston, SC, USA) ; Heo, Cindy Yoonjoung (Ecole hôtelière de Lausanne, HES-SO // University of Applied Sciences Western Switzerland) ; Panc, Bing (College of Charleston Charleston, SC, USA)

Hotel managers need to understand the marginal utility customers associate with a specific attribute ofa hotel in order to effectively set up rate fences and to price their rooms accordingly. This study adopteda stated choice experiment and discrete choice modeling method to obtain hotel guests’ willingness topay (WTP) for a specific set of room attributes within a single hotel property. The attributes include roomviews, hotel floor, club access, free mini-bar items, smartphone service, and cancellation policy. The studydiscovered that leisure travelers versus business travelers, and first-time visitors versus repeat visitors,perceive different WTP values for various attributes. These findings provide valuable information for hotelmanagers to segment their market and conduct revenue management practices in order to maximizerevenue and profit. The results also demonstrate the value of discrete choice modeling in obtaining WTPfor hotel room attributes.


Article Type:
scientifique
Faculty:
Economie et Services
School:
EHL
Subject(s):
Economie/gestion
Date:
2015
Published in:
Journal of hospitality management
Numeration (vol. no.):
August 2015, vol. 49, pp. 117-124
DOI:
ISSN:
0278-4319
Appears in Collection:

Note: The status of this file is: restricted


 Record created 2015-10-01, last modified 2019-11-28

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