Impact of Information on Customer Fairness Perceptions of Hotel Revenue Management

Abstract

Despite the prospective benefits of a revenue management (RM) program, some hotel managers remain concerned that customers perceive RM as being unfair. Studies have shown that offering customers information on a hotel’s pricing practices can enhance their perceptions of fairness. To determine how much and what type of information hotels should provide in this context, researchers administered a scenario-based survey to 120 travelers. The study found that giving would-be guests relatively complete information about how a hotel’s RM policies operate increases their perception of RM’s fairness. The study found that merely letting travelers know that the hotel’s rates vary was not enough to improve customers’ perceptions of fairness (even with a favorable rate). When respondents were also told that rates varied according to day of the week (with weekend rates being lower), length of stay, and how far in advance the reservation was made, their perceptions of fairness improved significantly.