Free add-on services and perceived value in competitive environments: Evidence from online hotel reviews

Shan Liu, Baojun Gao, Michael Gallivan and Yeming Gong ()
Additional contact information
Shan Liu: Xjtu - Xi'an Jiaotong University
Baojun Gao: Wuhan University [China]
Michael Gallivan: Kennasaw State University
Yeming Gong: EM - EMLyon Business School

Post-Print from HAL

Abstract: This study investigates how free add-on services affect customers' perceived value in horizontal and vertical competition. We collected 349,879 reviews about over 3000 hotels in 25 U.S. cities from TripAdvisor. Using three balanced data sets generated by coarsened exact matching, the ordered logistic regressions show that free hotel add-on services (including free breakfast, parking, and WiFi) positively affect consumers' perceived value. However, increased horizontal and vertical competition differentially weakens the positive effects of free add-on services. We not only observe a negative moderating effect of horizontal competition, but also identify three patterns of the marginal effects of these three add-ons in horizontal competition. The moderating effect of vertical competition exists from the higher-grade hotel segment to a lower-grade hotel, but such an effect is insignificant from the lower-grade hotel segment to a higher-grade hotel. Therefore, hotel managers should consider diverse external competitive environments and design appropriate differentiated service strategies.

Keywords: Service management; Hospitality Management; Operations; online reviews (search for similar items in EconPapers)
Date: 2020-09-01
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in International Journal of Hospitality Management, 2020, 90, ⟨10.1016/j.ijhm.2020.102611⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:hal:journl:hal-03188230

DOI: 10.1016/j.ijhm.2020.102611

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().