4. Conclusions & limitations
This study analyses the nature of the relationship between
hotel pricing and guest satisfaction. The literature on price as signals
of product quality is abundant but relatively little attention
is paid to price as indicators of sacrifice. Our empirical evidence
shows that a non-linear correlation between the hotel price and
guest satisfaction seems to lend some support for the two-sign
effect that price exercises on satisfaction, positive (quality) and
negative (sacrifice). Furthermore, we find that the relationship
between room price and guest satisfaction can be affected by
the moderating influence of room occupancy. The results may
shed light on some managerial implications for pricing strategy
in the hotel industry. Although hotel pricing might directly affect
guest satisfaction, its effect will be depleted in a peak season
(high occupancy), and vice versa. Therefore, hotel yield management
may not just controls room inventory but also affects guest
satisfaction.
Finally, this study has the limitations. To measure service quality,
we employ the ratio of room staff per guest room as a proxy of
hotel room service quality (SQ RM). In hotel context, this variable
is not related to quality.