The Role of Disclosure in Variable Hotel Pricing

Abstract

An exploration of cross-cultural differences in customers’ fairness perceptions of hotel room pricing found that increasing the level of information improved fairness perceptions for respondents in both the United States and Korea. Overall, U.S. consumers seem to perceive variable pricing practices as more fair than do their Korean counterparts. The extent of pricing information offered appears to have a diverse influence across the two culture groups. While only full information had a positive effect on American consumers’ fairness perceptions (i.e., what factors affected room rates and how those factors operate), limited information (i.e., just the knowledge that room rates vary and what factors affected room rates) was sufficient to improve fairness perceptions among Korean consumers. These findings have significant managerial implications for global hotel operators practicing revenue management across the two continents.