Tourists' willingness to pay for an accommodation: The effect of eWOM and internal reference price. (April 2017)

• Record Type: Journal Article
• Authors: Nieto-García, Marta; Muñoz-Gallego, Pablo A.; González-Benito, Óscar
• Is Part Of: International journal of hospitality management. Volume 62(2017)
• Page Start: 67
• Page End: 77
• Publication Date: 2017-04
• Subjects: Online reviews -- Willingness to pay -- Internal reference price -- eWOM valence -- eWOM volume -- Dynamic pricing; Hotel management -- Periodicals; Restaurant management -- Periodicals; Food service management -- Periodicals; Hôtels -- Gestion -- Périodiques; Restaurants -- Gestion -- Périodiques; Services alimentaires -- Gestion -- Périodiques; Food service management; Hotel management; Restaurant management; Periodicals; 647.94
• DOI: 10.1016/j.ijhm.2016.12.006
• Languages: English
• ISSNs: 0278-4319

Abstract

Highlights: EWOM valence has a positive effect on willingness to pay for tourism accommodations. EWOM volume and internal reference price strengthen this relationship. The analysis reveals a quadratic effect of internal reference price on willingness to pay. Abstract: Understanding the determinants of consumers' willingness to pay (WTP) is an important challenge especially for practitioners. This study evaluates the effect of external information (eWOM valence and volume) and internal information (internal reference price) on consumers' WTP for an accommodation. The results of an online experiment (n = 766) show a direct effect of valence on WTP which is strengthened by both volume and the internal reference price. Consumers with high reference prices are more sensitive to the effect of an increase in valence. Moreover, internal reference price has a non-linear influence on WTP. The findings suggest the relevant role of eWOM as well as internal reference price in determining consumers' WTP. The inclusion of these two variables in dynamic pricing strategies could lead to greater benefits for hospitality managers.