Exploring the Differences in Hotel Guests' Willingness-to-Pay for Hotel Rooms With Different Views

Abstract

This study investigates differential hedonic pricing in relation to the choice of different hotel room views and floors and attempts to find out the determinants of respondents' willingness-to-pay (WTP) based on the their sociodemographics, psychological inclinations, and other travel-related variables. The findings reveal significant differences between WTP amounts among hotel rooms with five different views. More specifically, this study found significant differences between WTP amounts for rooms on the 1st floor compared to those on the highest floor (20th floor) in a hotel. The results supported the rationale for setting up specific hedonic pricing strategies by hotel managers. Importantly, some significant determinants were obtained in predicting WTP amounts, providing a better understanding of how differential pricing strategies may be applied in the hotel industry.

Keywords:

• hedonic pricing
• willingness-to-pay
• room rates
• room view
• strategy

Acknowledgments

This research was sponsored by an internal research grant from the School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong.