Price, service-quality expectations and emotions have all been found to play a key role in customers’ assessments of offers, but little attention has been given to how these variables interrelate. This article presents an original model to study these interrelations. The model was tested on a sample of 841 hotel customers using structural equation modelling. The results show that the stronger the customers’ emotions, the more likely they were to perceive the product as cheap and the higher their predictive expectations of service quality. Additionally, although the observed price level influenced customers’ predictive expectations, the perception of a product as expensive or cheap did not. These findings have important business implications.
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