The search for the best deal: How hotel cancellation policies affect the search and booking decisions of deal-seeking customers

Chih Chien Chen, Zvi Schwartz, Patrick Vargas

Research output: Contribution to journalArticlepeer-review

Abstract

This study examined cancellation policies and their role in shaping travelers' deal-seeking behavior, exploring the impact of cancellation fees and deadlines on three, mutually exclusive, customers' hotel booking behavior categories: "Book", "Book and Search", and "Search" 291 subjects, who participated in a week long online "booking game", attempted to book a room in a virtual hotel and get the best deal. The results were tested using small sample t-test for comparing proportions between two independent populations, non-parametric multiple pairwise comparisons, and multinomial logit regression models. The findings indicate that the cancellation deadline affected participants' behavior while the size of the cancellation fee had no statistically significant impact. In addition, there was no significant difference between lenient cancellation deadline and no cancellation policy.

Original languageEnglish (US)
Pages (from-to)129-135
Number of pages7
JournalInternational Journal of Hospitality Management
Volume30
Issue number1
DOIs
StatePublished - Mar 1 2011

Keywords

  • Advanced booking
  • Cancellation deadline
  • Cancellation fee
  • Reservation decision-making

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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