The Effect of Price Discrimination on Fairness Perception and Online Hotel Reservation Intention

Abstract

In light of the development of online travel agencies (OTAs), the rules of the entire tourism industry have changed. Due to the ease of finding information and comparing products, consumers can choose a hotel not only by room type, but also by rate, according to their preferences. The purpose of this study was to explore the effect of price discrimination on the fairness perception toward reservation intentions. The interaction effects of the brand familiarity and the type of consumers on the fairness perception were also examined. The study used an experimental design, with 2 price discriminations × 2 brand familiarities × 2 regulatory focuses, on a total of 320 valid subjects. The results showed that advantaged-price discriminations had higher fairness perceptions than equal-price discriminations, and that higher fairness perceptions had higher reservation intentions. The interaction effect of brand familiarity showed no significant impact on the fairness perceptions, while the regulatory focus had a mitigating effect on the price discrimination and on the fairness perceptions. This study provides insights into the relationship between online price discrimination and tourism, and it contributes to the literature on hospitality. It also provides the managerial implications for online hotels in developing pricing strategies.

Keywords

• online hotel booking
• fairness perception
• price discrimination
• brand familiarity
• regulatory focus