Abstract: This study investigates how free add-on services affect customers’ perceived value in horizontal and vertical competition. We collected 349,879 reviews about over 3000 hotels in 25 U.S. cities from TripAdvisor. Using three balanced data sets generated by coarsened exact matching, the ordered logistic regressions show that free hotel add-on services (including free breakfast, parking, and WiFi) positively affect consumers’ perceived value. However, increased horizontal and vertical competition differentially weakens the positive effects of free add-on services. We not only observe a negative moderating effect of horizontal competition, but also identify three patterns of the marginal effects of these three add-ons in horizontal competition. The moderating effect of vertical competition exists from the higher-grade hotel segment to a lower-grade hotel, but such an effect is insignificant from the lower-grade hotel segment to a higher-grade hotel. Therefore, hotel managers should consider diverse external competitive environments and design appropriate differentiated service strategies.
Keywords: Hotel free add-ons; Perceived value; Online review; Horizontal competition; Vertical competition
Liu S., Gao, B.*, Gallivan, M., Gong, Y. (2020). Free Add-On Services and Perceived Value in Competitive Environments: Evidence from Online Hotel Reviews. International Journal of Hospitality Management, 90:102611.
本文于2020年9月正式发表于International Journal of Hospitality Management 第 90 卷，该刊为学院英文 A- 类奖励期刊， 高宝俊为本文通讯作者。