Customers' Perceptions of Best Available Hotel Rates

Abstract

A study of 153 travelers in three airports (Dallas, Pittsburgh, and Ithaca) found that respondents held a generally negative view of hotel companies' pricing policies. The respondents were asked specifically about their reaction to best available rate pricing, as compared to the common practice of quoting a single rate for a multiple-night stay. Compared to the single-rate policy, respondents judged that being charged the lowest possible rate for each night is more fair, more acceptable, more reasonable, and more honest, even if the room rate changes from night to night. In particular, infrequent travelers (those staying in hotels twenty nights per year or less) judged best rate pricing most favorably. In contrast, frequent travelers were essentially indifferent to the two pricing approaches.