Asymmetric preference in hotel room choice and implications on revenue management

Lorenzo Masiero, Bing Pan, Cindy Yoonjoung Heo

Research output: Journal article publicationJournal articleAcademic researchpeer-review

24 Citations (Scopus)

Abstract

In selecting a hotel room, guests evaluate specific room characteristics. After their stay, these characteristics are used as reference levels in deciding which hotel room to stay in the future. According to prospect theory, the gains (i.e., upgrade or improving) and losses (i.e., downgrade or worsening) with respect to the reference level are perceived differently by individuals. In particular, losses are weighted more than gains. This research investigates the asymmetric preference in hotel room choice by performing a stated choice experiment among the guests of a hotel in Hong Kong. A mixed logit model is estimated by deriving different coefficients for improving and worsening conditions, and attribute-specific cluster analyses are performed to identify those segments with similar preferences. The results confirm the validity of reference-dependent specification in hotel room choice and provide insights for revenue managers in relation to their aim to maximize revenue for repeat guests.
Original languageEnglish
Pages (from-to)18-27
Number of pages10
JournalInternational Journal of Hospitality Management
Volume56
DOIs
Publication statusPublished - 1 Jul 2016

Keywords

  • Asymmetric preference
  • Discrete choice modeling
  • Hotel room choice
  • Reference-dependent behavior
  • Revenue management
  • Stated choice experiment

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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