The Influence of Hotel Price on Perceived Service Quality and Value in e-tourism

Table 7

The Moderating Role of Trip Type

Quality Rating

TripType = 1 (Business)

TripType = 0 (Leisure)

Log(Price)

0.022* (0.016)

0.019

 

(0.014)

Log(Ranking)

−0.261*** (−0.354)

−.255*** (−0.389)

StarRating

0.043*** (0.033)

0.078*** (0.062)

Constant

1.17***

1.04***

Number of cases

21,206

20,683

R

2

0.145

0.187

F value

1200.23

1584.29

Note: Standardized coefficients are in parentheses.

*p < .1. **p < .05. ***p < .01.

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Ye et al. / INFLUENCE OF HOTEL PRICE ON PERCEIVED SERVICE QUALITY  35

Moreover, this study has valuable practical implications for hotel managers. 

First, when customers evaluate a hotel, the price they have paid has a negative 

effect on their perception of its value but a positive one on its perceived quality. 

Hence, customer reviews usually imply that a high price relates to high service 

quality but not value. A hotel with high ratings for both quality and value should 

be an ideal place for customers to stay. In terms of perceived value, customers’ 

perception of quality plays a more important role in their evaluation than price 

alone, which implies that it is quality that determines hotels’ competitiveness. 

Thus, hotel managers should pay attention to improving service quality in order 

to obtain and retain better value ratings.

Second, these findings also suggest that the influence of price on perceived 

value increases as one goes up through the star ratings from economy to luxury 

hotels. This implies that as star rating increases, customers gradually shift their 

focus to price. Hotel managers should take note of this so as to maintain equi-

librium between price and quality. However, price has a negative but insignifi-

cant effect on perceived quality for economy hotels, partially due to customers’ 

lack of knowledge of lower prices. Since price has a positive and significant 

impact on perceived quality for both midscale and luxury hotels, it would 

appear that customers perceive a higher price as implying better-quality service.

Last, these results suggest that trip type moderates the impact of price on 

perceived quality. Price does not play a significant role for leisure customers but 

does for business travelers. One of the reasons why business travelers attach 

more importance to the impact of price on perceived quality is because they 

require comfort on business trips and tend to believe a higher price will reflect 

a better-quality experience. However, leisure customers do not think perceived 

quality is directly linked to price. Therefore, hotel managers should pay atten-

tion to the differences between these two groups in order to provide a better 

service and hence obtain better online evaluations.