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.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Economics and Econometrics
- Strategy and Management