Magic Number 8: Hospitality Price Ending Strategies

ABSTRACT

It is not uncommon to see prices that end with a 9 or 99, be it in a restaurant, grocery store, or clothes store. Yet, this convention in pricing is typically found in the US, and evidence of it in the Asian marketplace remains limited. Given this, the present study pioneers an empirical investigation on price ending strategies in Asian marketplaces, particularly in the hospitality industry. Using automated data extraction, a total of 63,075 room rates were sampled from 21 hotels operating in Macau that were advertised online. The digit 8 is the most frequently used price ending, especially by five-star hotels and upper-scale rooms. Conversely, 4 was not the least frequently used price ending. These findings provide guidance to hospitality pricing managers who are not aware of the local culture and the price-ending dynamics of the Asian marketplace.

摘要

在餐厅, 杂货店或服装店看到以9或99结尾的价格并不罕见, 这种定价惯例策略在美国地区是十分常见及普及。但是, 关于此种定价策略的研究在亚洲地区较为缺乏。鉴于此, 本研究开创了对亚洲市场, 尤其是酒店业中的价格终结策略的实证研究。使用自动数据提取, 从21家澳门营运的酒店中透过在线采样了63,075个房间的价格, 发现数字8是最常用的价格结尾, 尤其是在5星酒店中的高端客房更为常见。相反, 4不是最不常用的价格尾数。这些发现将为在亚洲市场对当地文化不了解的酒店定价管理者在价格终点动态之策略提供参考。

KEYWORDS:

• Price endings
• psychological pricing
• just below price endings
• 8-ending prices
• hotel pricing

关键词:

• 价格结尾
• 心理定价
• 略低于价格结尾
• 8结尾价格
• 酒店价

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. Average price of a license plate in Macau is USD 5,898.

2. 1 USD = 7.98 MOP

Additional information

Notes on contributors

Henrique Fátima Boyol Ngan

Henrique Fátima Boyol Ngan is Assistant Professor in School of Tourism Management at Macao Institute for Tourism Studies, Macau SAR, China. His research interests include psychological pricing, human resources management, eye tracking and implicit association test (E-mail: https://[email protected]).

Ali Bavik

Ali Bavik is Assistant Professor in School of Tourism Management at Macao Institute for Tourism Studies, Macau SAR, China. His research interests include tourist behavior, corporate social responsibility, psychological contract, and leadership. He has published a number of articles in high profile academic journals and conferences in topics related to tourism and hospitality management. He is a part of the Editorial Board of the Journal of Hospitality and Tourism Insights (E-mail: https://[email protected]).

Joaquim Eduardo Goncalves Severino

Joaquim Eduardo Goncalves Severino is Assistant Professor at the Faculdade de Ciências da Universidade de Lisboa & Centro de Estatística e Aplicações da Universidade de Lisboa. His main research interests focus on modeling and forecasting time series, spatial and environmental statistics, statistics applied to social sciences and human behavior, and biostatistics research interests (E-mail: https://[email protected]).

Hugo Teixeira

Hugo Teixeira received a BA in Linguistics from San Jose State University, an MA in Online and Distance Education from the The Open University (UK) and recently graduated from the MFA in Photography and Related Media program at Rochester Institute of Technology. His research interest includes communities of practice and how these can be leveraged to develop visual and linguistic communication skills among students in disparate geographical areas (E-mail:https://[email protected]).