Strategic-level perceived fairness of hotel dynamic pricing: the role of cues and the asymmetric moderating effect of inflation attribution

Abstract

This study examines consumers’ perceived fairness of hotel dynamic pricing, particularly in the evolving contexts of inflation and the post-pandemic phase. Instead of focusing solely on individual price points or price increases, this study develops a fairness model of dynamic pricing at the strategy level. It incorporates both social and physiological cues and broader contextual factors, given the inherent uncertainty surrounding the equality of outcomes. A sample of 579 U.S. consumers was recruited using Qualtrics consumer panel services. The study employs an orthogonalizing approach to eliminate the collinearity introduced by creating interaction terms. Rather than relying on internal price comparison, this study finds that consumers rationalize the pricing strategy based on two key cues: negative emotions and corporate social responsibility (CSR). Moreover, the study reveals an asymmetric effect of inflation attribution in moderating the cue-fairness linkage. Attributing dynamic pricing to inflation buffers the adverse effect of negative emotions while not enhancing the positive effect of CSR. Lastly, the study indicates that consumers’ perceived fairness of dynamic pricing increases consumer loyalty while decreasing revenge.