Luxe for Less

Abstract

As an emerging distribution channel, online discount websites are gaining popularity among luxury hotels. However, little guidance on the effectiveness of such price promotions in luxury hotels is provided in the extant literature. Building on the status consumption theories, we examine the joint effects of price promotions and need for status (NFS) on consumers’ attitudes toward the hotel as well as their intentions to return. Our results indicate that consumers who are high in NFS exhibit less favorable attitudes toward the luxury hotel and a lower likelihood to return on having learned that the hotel plans to implement price promotions through discount websites. On the contrary, customers who are low in NFS are unaffected by the presence of price promotions via discount websites. Therefore, luxury hotels that traditionally attract consumers high in NFS need to be aware that using price promotions via discount websites might have a detrimental effect on consumers’ perceptions of the hotel.