How Hotel Guests Perceive the Fairness of Differential Room Pricing

Abstract

When customers perceived hotel revenue management practices to be fair, they are more likely to be satisfied with the hotel and are more likely to return to that hotel in the future. In this survey of 815 people, we examined the effects of three factors on the respondents’ assessment of the fairness of hotel rate policies. Those three factors were familiarity with the practice, provision of information about the practice, and the brand class of the hotel. Of those three, we found that familiarity with a pricing practice was far and away the most important factor affecting perceived fairness. The implication is that revenue managers should focus their efforts on increasing guests’ familiarity with their pricing practices.