Effects of Pricing Strategies on Consumers’ Booking Intention for Green Hotels

Ng, Manwai
Kim, Peter
Kim, Jungkeun
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Master of International Hospitality Management
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Auckland University of Technology

The purpose of this dissertation is to explore how different pricing strategies influence customers’ booking intention for green hotels. This research constructed different levels of price and precision, along with perceived quality and sacrifice to examine their impacts on consumers’ behavioural intention. Specifically, this research investigates how booking intention for a green hotel is influenced by perceptions of quality and sacrifice, and whether their perceptions are related to the impact of pricing strategies. Research hypotheses are developed based on theory in the areas of green marketing, conventional marketing and product pricing.

Experimental design is used as a methodological approach to test the hypotheses and online survey is used as an instrument to collect data. A total of three hundred and seventy-two respondents from the United State of America through panel company Amazon Mechanical Turk participated in this research. Two studies were conducted to test the hypotheses. One hundred and three responses were collected for Study 1 with two scenarios, high price luxury hotels and low price budget hotels. Two hundred and sixty-nine samples were recruited for Study 2 with a 2 (high price vs. low price) x 2 (rounded price vs. precise price) between subjects experimental design to further explore the impact of pricing strategies.

The findings of this study indicate that the relative preference for the premium priced green hotel over the conventional priced non-green hotel option is stronger in the high price level and with rounded price. Customer’s booking intention for green or non-green hotels is significantly influenced by their perceived quality and sacrifice of the hotel price. The impact of price level and price precision can be explained by their perceived sacrifice. Customers’ willingness to pay extra for green initiatives is significantly influenced by their perceived quality of the hotel. Overall, the findings extend the current understanding of green consumption behaviour and helps to broaden knowledge about customers’ attitudes toward eco-friendly hotels.

Green Hotels , Green marketing , Booking intention , Pricing strategies , Price perception
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