The pre-pandemic role of customer online satisfaction in price determination: evidence from hotel industry

Palić Irena (), Palić Petra () and Frane Banić
Additional contact information
Palić Irena: Faculty of Economics and Business, University of Zagreb, Croatia
Palić Petra: Catholic University of Croatia, Croatia

Croatian Review of Economic, Business and Social Statistics, 2021, vol. 7, issue 2, 50-60

Abstract: This study examines the importance of online reviews for price determination in the hotel industry in the pre-pandemic period. The research is conducted for Croatian small open economy with a developed tourism sector. The paper fills the gap in existing literature by using multivariate principal component analysis to group various customer satisfaction categories in the hotel industry and assessing the relationship between customer satisfaction and hotel price. The conducted empirical analysis points to a positive statistically significant relationship of guest satisfaction and hotel prices. Moreover, linear regression modelling is conducted separately for four-star and five-star hotels. The estimated impacts are statistically significant and positive, but the effects are twice as strong in five-star hotels then in four-star hotels. The obtained results indicate that hotel star rating impacts the strength of the relationship between hotel prices and guest satisfaction. Recognizing the link between hotel ratings, online reviews and pricing is essential both for hotel managers and customers. Hence, the paper provides valuable conclusions from the aspect of supply and demand side in the hotel industry.

Keywords: customer satisfaction; hotel pricing; hotel star rating; multivariate analysis; principal component analysis; regression analysis (search for similar items in EconPapers)
JEL-codes: C38 L83 Z3 Z32 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/crebss-2021-0009 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:crebss:v:7:y:2021:i:2:p:50-60:n:1

DOI: 10.2478/crebss-2021-0009

Access Statistics for this article

Croatian Review of Economic, Business and Social Statistics is currently edited by Dragan Bagić, Ksenija Dumičić and Nataša Erjavec

More articles in Croatian Review of Economic, Business and Social Statistics from Sciendo
Bibliographic data for series maintained by Peter Golla ().