Attribute-based pricing in hotels: Analyzing industry, customer, and behavioral insights

Abstract

This research investigates attribute-based pricing (ABP) in the hotel industry through three sequential studies. Study 1 identifies valuable and sellable hotel attributes based on expert interviews. Study 2 estimates customer willingness to pay for selected set of attributes using conjoint analysis. Study 3 experimentally tests three pricing formats, namely traditional room pricing (TRP), ABP without price tags, and ABP with price tags, to examine their effects on perceived price complexity, fairness, and willingness to book. Results show that ABP with price tags reduces perceived complexity compared with TRP and enhances fairness perceptions and booking intentions relative to both TRP and ABP without price tags. The findings emphasize the importance of transparency in ABP and advance customer-centric approaches to hotel revenue management.