Perception of price fairness and customer response behaviors

To combat with the intense rivalry, increase competitive advantage and maximizing sales and revenues, many hotels operators are implementing the revenue management concept or yield management. Revenue management is the ability of the hotel to sell the right product to the right customer at the right time with the right price through the right distribution channels. The concept are characterized by the ability of the hotel to segment the markets, control perishable inventory, product sold in advance, fluctuating demand, low marginal sales costs, and high marginal production costs. In implementing the concept, hotel operators need to maximize the room rates when the demand is high and maximize the room sales when the demand is low. However, such practices often leads to unfairness issues that could jeopardize the relationship between the hotels and the customers and perception of price fairness is believed associated well with the customer response behaviors. This monograph highlights the empirical investigation on perception of price fairness and customer response behaviors.