Perceived unfairness of prices resulting from yield management practices in hotels

This study analyzes the consumer perception of yield management (YM) with an example in the hotel sector. Hotels use these practices in order to increase their incomes. However, the dual entitlement theory suggests that customers perceive YM practices as unfair when they are not the result of cost increase or external factors. This study explores four YM practices that might be suitable in the hotel context through an empirical study of the behavior of 1010 customers. The study consists of non-parametric tests to analyze the perception of YM practices and Anova tests to identify relationships between the variables that may explain customer behavior. The results show that the manner of presenting the YM practices to consumers (positive or negative frame) has a considerable influence on their perception. Lastly, loyal customers perceive price changes the YM introduces as more unfavorable. From this point of view, firms can use several managerial levers in the communication of tariff practices and management of loyalty programs to avoid or reduce customers' perception of unfairness.