Selling Rooms Online: The Use of Social Media and Online Travel Agents

Purpose – This paper aims to focus on the reason why hoteliers choose to be present in online travel agent (OTA) and social media web sites for sales purposes. It also investigates the technological and human factors related to these two practices. Design/methodology/approach – The research is based on a survey sent to a wide range of hotels in a Swiss touristic region. The empirical analysis involves the specification of two ordered logit models exploring the importance (in terms of online sales) of both social media and the online travel agent, Booking.com. Findings – Findings highlight the constant tension between visibility and online sales in the web arena, as well as a clear distinction in social media and OTA web site adoption between hospitality structures using online management tools and employing personnel with specific skills. Practical implications – The research highlights the need for the hospitality industry to maintain an effective presence on social media and OTAs in order to move towards the creation of a new form of social booking technologies to increase their visibility and sales. Originality/value – This research contributes to understanding the major role played by OTAs and social media in the hospitality industry while underlining the possibility of a major interplay between the two

Estimation of indirect cost and evaluation of protective measures for infrastructure vulnerability: A case study on the transalpine transport corridor

Infrastructure vulnerability is a topic of rising interest in the scientific literature for both the general increase of unexpected events and the strategic importance of certain links. Protective investments are extremely costly and risks are distributed in space and time which poses important decision problems to the public sector decision makers. In an economic prospective, the evaluation of infrastructure vulnerability is oriented on the estimation of direct and indirect costs of hazards. Although the estimation of direct costs is straightforward, the evaluation of indirect cost involves factors non-directly observable making the approximation a difficult issue. This paper provides an estimate of the indirect costs caused by a two weeks closure of the north-south Gotthard road corridor, one of the most important infrastructure links in Europe, and implements a cost-benefit analysis tool that allows the evaluation of measures ensuring a full protection along the corridor. The identification of the indirect cost relies on the generalized cost estimation, which parameters come from two stated preference experiments, the first based on actual condition whereas the second assumes a road closure. The procedure outlined in this paper proposes a methodology aimed to identify and quantify the economic vulnerability associated with a road transport infrastructure and, to evaluate the economic and social efficiency of a vulnerability reduction by the consideration of protective measures.infrastructure vulnerability, choice experiment, cost-benefit analysis, freight transport

Accounting for WTP/WTA discrepancy in discrete choice models: Discussion of policy implications based on two freight transport stated choice experiments

A key input in cost-benefit analysis is represented by the marginal rate of substitution which expresses the willingness to pay, or its counterpart willingness to accept, for both market and non-market goods. The consistent discrepancy between these two measures observed in the literature suggests the need to estimate reference dependent models able to capturing loss aversion by distinguishing the value attached to a gain from the value attached to a loss according to reference dependent theory. This paper proposes a comparison of willingness to pay and willingness to accept measures estimated from models with both symmetric and reference dependent utility specifications within two different freight transport stated choice experiments. The results show that the reference dependent specification outperforms the symmetric specification and they prove the robustness of reference dependent specification over datasets designed according different attributes levels ranges. Moreover we demonstrate the policy relevance of asymmetric specifications illustrating the strong implications for cost-benefit analysis in two case studies.WTP/WTA discrepancy, freight choice, policy evaluation

A comparison of prospect theory in WTP and preference space

The importance of willingness to pay (WTP) and willingness to accept (WTA) measures in the evaluation of policy measures has led to a constant stream of research examining survey methods and model specifications seeking to capture and explain the concept of marginal rates of substitution as much as possible. Stated choice experiments pivoted around a reference alternative allow the specification of discrete choice models to accommodate the prospect theory reference dependence assumption. This permits an investigation of theories related to loss aversion and diminishing sensitivity, and to test the discrepancy between WTP and WTA, widely documented within the literature. With more advanced classes of discrete choice models at our disposal, it is now possible to test different preference specifications that are better able to measure WTP and WTA values. One such model allowing for utility to be directly specified in WTP space has recently shown interesting qualities. This paper compares and contrasts models estimated in preference space to those estimated in WTP space allowing for asymmetry in the marginal utilities by estimating different parameters according to reference, gain and loss values. The results suggest a better model fit for the data estimated in WTP space, contradicting the findings of previous researches. The parameter estimates report significant evidence of loss aversion and diminishing sensitivities even though the symmetric specification outperforms the asymmetric ones. Finally, the analysis of the WTP and WTA measures confirms the higher degree of WTA compared to WTP, and highlights the appeal of the WTP space specification in terms of plausibility of the estimated measures.choice experiments, willingness to pay space, preference asymmetry

Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment

Choice behaviour might be determined by asymmetric preferences whether the consumers are faced with gains or losses. This paper investigates loss aversion and diminishing sensitivity, and analyzes their implications on willingness to pay and willingness to accept measures in a reference pivoted choice experiment in a freight transport framework. The results suggest a significant model fit improvement when preferences are treated as asymmetric, proving both loss aversion and diminishing sensitivity. The implications on willingness to pay and willingness to accept indicators are particular relevant showing a remarkable difference between symmetric and asymmetric model specifications. Not accounting for loss aversion and diminishing sensitivity, when present, produces misleading results and might affect significantly the policy decisions.freight transport, choice experiments, willingness to pay, preference asymmetry

The role of the reference alternative in the specification of asymmetric discrete choice models

Within the discrete choice modelling literature, there has been growing interest in including reference alternatives within stated choice survey tasks. Recent studies have investigated asymmetric utility specifications by estimating discrete choice models that include different parameters according to gains and losses relative to the values of the reference attributes. This paper analyses asymmetric discrete choice models by comparing specifications expressed as deviations from the reference point and specifications expressed in absolute values. The results suggest that the selection of the appropriate asymmetric model specification should be based on the type of the stated choice experiment.stated choice experiments, reference alternative, preference asymmetry, willingness to pay

Shift of reference point and implications on behavioral reaction to gains and losses

It is widely recognized that individual decision-making is subject to the evaluation of gains and losses around a reference point. The estimation of discrete choice models increasingly use data from stated choice experiments which are pivoted around a reference alternative. However, to date, the specification of a reference alternative in transport studies has been fixed, whereas it is common to observe individuals adjusting their preferences according to a change in their reference point. This paper focuses on individual reactions, in a freight choice context, to a negative change in the reference alternative values, identifying the behavioural implications in terms of loss aversion and diminishing sensitivity. The results show a significant adjustment in the valuation of gains and losses around a shifted reference alternative. In particular, we find an average increase in loss aversion for cost and time attributes, and a substantial decrease for punctuality. These findings are translated to significant differences in the willingness to pay and willingness to accept measures, providing supporting evidence of respondents' behavioural reactio

Choice behaviour in online hotel booking

The objective of this study is to analyse how people process information and make decisions with regard to booking hotel rooms via online booking systems. The authors propose a nested decision process and compare it with the approach of previous literature in analysing the determinants in choosing a hotel. This research attempts to model online hotel bookings in the real market using discrete choice modelling. The methodology is based on the estimates of nested logit models, and the results show that tourists choose a hotel by going through a number of staged decision structures, which is in line with Associative Network Theory and the Cybernetic decision-making model

Analyzing loss aversion and diminishing sensitivity in a freight transport stated choice experiment

Choice behaviour might be determined by asymmetric preferences whether the consumers are faced with gains or losses. This paper investigates loss aversion and diminishing sensitivity, and analyzes their implications on willingness to pay and willingness to accept measures in a reference pivoted choice experiment in a freight transport framework. The results suggest a significant model fit improvement when preferences are treated as asymmetric, proving both loss aversion and diminishing sensitivity. The implications on willingness to pay and willingness to accept indicators are particular relevant showing a remarkable difference between symmetric and asymmetric model specifications. Not accounting for loss aversion and diminishing sensitivity, when present, produces misleading results and might affect significantly the policy decisions

A Comparison of the Impacts of Aspects of Prospect Theory on WTP/WTAEstimated in Preference and WTP/WTA Space

The importance of willingness to pay (WTP) and its counterpart willingness to accept (WTA), in the evaluation of policy measures has led to a constant stream of research examining survey methods and model specifications seeking to capture and explain the concept of marginal rates of substitution as much as possible. Stated choice experiments pivoted around a reference alternative allow the specification of discrete choice models to accommodate aspects of Prospect Theory, in the particular reference dependence. This permits an investigation of theories related to loss aversion and diminishing sensitivitywidely documented within the literature. This paper seeks to examine a number of theoretical developments. In particular, the paper seeks to empirically examine a number of aspects related to decision making processes that are posited to exist by Prospect Theory, namely reference dependence, loss aversion and diminishing sensitivities. Unlike previous research which has examined these issues in the past, we examine these assumptions on WTP/WTA rather than on the marginal utilities of decision makers. In doing this, the paper simultaneously compares and contrasts different econometric forms, in particular estimating models in preference space with WTP/WTAs calculated post estimation versus models estimated directly in WTP/WTA space where WTP/WTAvalues are directly during estimation. We find evidence for reference dependence and loss aversion in WTP/WTA for different time attributes, however we find less compelling evidence for the existence of diminishing WTP/WTAs