Pricing in a social world: The influence of non-price information on hotel choice

Abstract

Effective pricing requires an understanding of how consumers use price and non-price information in purchase decisions. In this study we use discrete choice analysis to examine how hotel consumers trade off price and three sources of non-price information – user-generated content (UGC), UGC-derived ratings and brand name – during the choice process. Although all types of information had a significant effect on hotel choice, review valence emerged as the dominant choice driver. Further, a qualitative data analysis suggests that consumers integrate price with non-price information to assess value pre-purchase, and can be swayed to a higher price if non-price data suggest a superior experience. Implications for revenue management practitioners are discussed.