We all know the importance of pricing in the consumer decision-making process, however only a bunch of people deeply understand the real dynamics of the multiples dimensions and their impact on hotel bookings. The price it’s one of the most important elements for bookings or customer decision when compared directly with completive set, although this is not the only one and often may even be irrelevant to the final choice of hotel where you want to stay overnight.
Not relevant for the final choice? How this is possible?
Everything is directly related to the concept of value that the consumer gives to a certain service that he or she wants to enjoy, when compared with other competing services on the same level of perceived quality.
We propose to revise the concept of price and value, the value perceived by the customer may include material values and quality, benefits of use or property and status that is assigned to him or that is provided by service. This perception of value can consider diverse characteristics, such as social status, age, gender, economic power, cultural elements, what so ever. This phenomenon it can be more or less accentuated. However, we can say that in premium services a low price can be harmful to its sale, because there is a perception of lack of quality in product or service by the consumer.
"Value is the basis of the consumer's decision in the decision-making process"
In decision process we have the following elements:
Often there is a gap between the monetary amount that is requested, and the value assigned by the potential guest. When this happens, the purchase is not carried out because he’s not available to pay what is requested, considering the characteristics of the product or service in question. When the consumer, even so, decides to buy becoming a customer and subsequently a guest, he is often dissatisfied with the product or service. This happens because the cost that he gives to his acquisition and the benefit resulting from its use does not produce a positive balance . We can represent it mathematically as being:
Total customer value = Perceived value or Service value - Total acquisition costs
Price: is the monetary amount expressed numerically associated with a product or service ($).
Value: will be the representation of the benefit for those who purchase the product or service. It is like the balance between the advantages of acquiring the service for its satisfaction and the monetary amount that it was willing to pay.
In this equation, the consumer considers tangible and intangible benefits that result in their full satisfaction. The consumer evaluates the quality of the service provided, used materials, intrinsic characteristics of the service, the status it represents or in narcissistic view its pure ego satisfaction.
- These elements are the tangible aspects inherent to the service that translate into:
- created trust
- responsiveness and time for implementation
- guarantee of quality service
- care and empathy created by the service provider with customer
All those elements, combined with quality factors, are the driving force for a complete customer satisfaction.
It should also be noticed that hotel satisfaction has three distinct moments, before arrival at the hotel, during the stay and after the stay. They all influence positively or negatively customer satisfaction.
Procedures and actions of THRM  help identify those elements and influence the perceived value of the customer, making them apt and available to spend a higher monetary amount to buy the service.