Hotel revenue management and the Internet: The effect of price presentation strategies on customers’ willingness to book

Abstract

A decision that is intrinsic to the application of hotel best available rate (BAR) pricing is how to present the BARs for individual nights within a multiple-night stay to prospective hotel guests. We discuss two alternative price presentation strategies, a blended and a nonblended rate approach, and examine their effect on customers' willingness to pay in the context of Internet-based reservation requests. Study findings indicate that a nonblended rate presentation approach generates higher willingness to book ratings than a blended rate presentation approach. Furthermore, when it comes to nonblended rates, familiarity with BAR pricing moderates the effect of rate sequence on customers' willingness to book.