Expectation Formation in Case of Newer Hotels

Abstract

Advertisement and price cues are important sources of information, which influence tourists when forming service expectations, particularly in the case of newer hotels. However, it is not clear if such hotels need to promise more or less through their advertisement; or price high or low through their price cues. Extant research is also uncertain about the role of culture (uncertainty avoidance and power distance) in moderating the impact of advertisement and price cues on expectations. Using an experimental setup with 218 tourists from three different countries, this study finds that a newer hotel is likely to be better off by offering more service promises through its advertising and high price cues to its prospective visitors. The results suggest that culture influences how tourists process advertising cues but has no influence on price cues. The study provides insights for managers on how to develop a segmentation strategy using the cultural profiles of tourists.

Digital Destination Matching: Practices, Priorities and Predictions

“…Specific cultural characteristics, such as individualism, long-term orientation, and indulgence, are especially influential in this regard [20]. Tourists from high power-distance cultures are more likely to prefer tourism destinations, products, and services that enhance their credibility of belonging to a superior social class, higher prestige, and wealth [21]. Tourists from high-power distance cultures thus place much greater importance on tangible elements of a destination or tourism establishment, since the grandeur of tangible objects conveys a message about status, through association with luxury, exclusivity, and elitism.…”