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Hotel & Tourism Management
Master of Science (M.S.)
Year Degree Awarded
Month Degree Awarded
Revenue management, Perceived fairness, Reputation
In revenue management practice, the issue of perceived fairness is a serious concern, because revenue management applies different prices for basically the same service. The purpose of this study is to examine the effect of hotel revenue management pricing on customers’ perceptions of fairness. Specifically, this study explores whether framing revenue management pricing as discounts rather than surcharges would significantly enhance customers’ perceived fairness. In addition to framing, this study investigates whether customers’ perceived fairness is affected by the fencing condition customers are in. Furthermore, most importantly, this study proposes that such framing and fencing condition effects are moderated by a hotel’s reputation with a revenue management pricing practice. This study found that framing and fencing condition had a significant effect on customers’ fairness perception, respectively. In addition, this study found that reputation moderated the effect of framing on perceived fairness. When the hotel had a poor reputation, framing as a discount rather than framing as a surcharge considerably increased customers’ perceived fairness. When the hotel had a good reputation, however, there was no significant difference between priced framed as a discount and a surcharge. This study supports hotel managers to understand how customers perceive fairness in revenue management practices and also provides hotel managers with broad acceptance levels of the tested revenue management pricing mechanisms.