Globalization or localization of consumer preferences: The case of hotel room booking

Abstract

The purpose of this study is to investigate potential differences in attitudes between Chinese and Western tourists towards various hotel room reservation policies. The study is meant to help the revenue managers of international hotel companies make informed choices on whether to pursue a globalized or a localized approach in the design of hotel room rates and rate restrictions. Three ranges of room prices and four types of rate restrictions are evaluated. The rate restriction policies considered are: a) rule type, b) advance requirement, c) refundability, and d) changes allowed. The results of customer surveys show that the Chinese and Western respondents do not express significantly different preferences concerning room rates, advance requirement, rule type, or refundability. They differ significantly only concerning the changes allowed policy. This result indicates that revenue managers of international hotel companies can take a globalized approach in designing rate restrictions. The identification of these customer preferences provides hotel revenue managers with empirical data on the attitudes of culturally diverse consumers, and this information can enable the design of hotel pricing policies that attract consumers in the global market.