TY - JOUR
T1 - Free add-on services and perceived value in competitive environments
T2 - Evidence from online hotel reviews
AU - Liu, Shan
AU - Gao, Baojun
AU - Gallivan, Michael
AU - Gong, Yeming
N1 - Publisher Copyright:
© 2020 Elsevier Ltd
PY - 2020/9
Y1 - 2020/9
N2 - 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.
AB - 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.
KW - Horizontal competition
KW - Hotel free add-ons
KW - Online review
KW - Perceived value
KW - Vertical competition
UR - https://www.scopus.com/pages/publications/85087380840
U2 - 10.1016/j.ijhm.2020.102611
DO - 10.1016/j.ijhm.2020.102611
M3 - 文章
AN - SCOPUS:85087380840
SN - 0278-4319
VL - 90
JO - International Journal of Hospitality Management
JF - International Journal of Hospitality Management
M1 - 102611
ER -