THE INTERACTION EFFECTS OF PRICE AND CANCELLATION POLICIES ON ONLINE HOTEL BOOKING INTENTIONS: A BETWEEN-SUBJECTS FACTORIAL EXPERIMENT IN THAILAND
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Abstract
This research investigates 1) the interaction effects of pricing strategies and cancellation policies on consumers' online hotel booking intentions and 2) how these factors interact to influence booking intentions. Employing a rigorous experimental design with a two-way ANOVA, the study analyses how individual and combined factors influence consumer behaviour in the online hospitality market. The sample consisted of 510 participants, selected through purposive sampling. Data was collected through a questionnaire using a 2x3 factorial, between-subjects, and analysed using descriptive statistics and Two-way ANOVA. The research results were found as follows:
A significant interaction exists between price and cancellation policies, indicating that flexible cancellation options can boost booking intentions, even at higher prices. The presence of a favourable cancellation policy, such as a full refund for cancellations made at least seven days in advance, significantly increases the likelihood of consumers booking more expensive hotel rooms.
Cancellation policies play a vital role in shaping consumer perceptions of value and reducing perceived risks associated with online hotel bookings, providing hoteliers with a valuable tool to influence booking behaviour.
The findings contribute to the existing literature by offering valuable insights into the decision-making framework of travellers, suggesting that hospitality operators should carefully integrate pricing and cancellation policies to align with consumer preferences. Moreover, this research highlights the importance of understanding the interplay between various factors influencing consumer behaviour, offering strategic implications for marketing and operational practices in the hospitality sector. Future studies are recommended to explore additional variables, such as service quality and brand reputation, to further unravel the complexities of consumer booking intentions in the evolving digital landscape of hotel reservations.
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