Hotel attributes: asymmetries in guest payments and gains: a stated preference approach

Abstract

This paper reports the existence of asymmetries in the preference formation of potential guests with regards their perception of hotel attributes. In the same way, using choice experimentation, we can confirm that similar asymmetries exist in their willingness to pay measures based on the valuation of losses or gains. The specification of a reference dependent utility function allows the application of prospect theory to an analysis of choices made by consumers when they evaluate attributes that define hotel service quality. The results show the existence of significant discrepancies between the monetary compensation a customer would accept if a reduction in hotel quality was produced and the amount he/she would be willing to pay if the service quality were improved. The results imply important implications and recommendations for hotel managers and policy makers.