| dc.description.abstract | Demand and hedonic based pricing strategies provide hotel practitioners opportunities
for adjusting prices depending on, guest preferences, and seasonal changes thus
enhancing competitive advantage. Customers are able to compare the offers made by
specific service providers in order to make significant purchase choice. However, these
strategies are underutilized by hoteliers in Nakuru County due to their overreliance on
cost based pricing strategies resulting to negative guest perception about the prices.
Consequently, cost based pricing has resulted to reduced guest loyalty and declined
purchase since some guests prefer variable prices to fixed prices. The purpose of this
study was to establish the effect of demand based and hedonic pricing strategies on
hotel guest purchase decisions in Nakuru County. The specific objectives were, to
determine the effect of demand based pricing strategy on hotel guest purchase decision
in Nakuru County and to assess the effect of hedonic pricing strategy on hotel guest
purchase price in Nakuru County. The study employed descriptive cross sectional
research design anchored on hedonic pricing theory and buying process five stage
model. The target population was 1,792 guests from which a sample size of 276 guests
was derived using Krejcie and Morgan (1970) sample size determination technique.
Purposive and proportionate sampling techniques were used to select hotels and guests
respectively. Primary data was collected using a structured questionnaire designed
using Likert type of scale. A reliability coefficient of (α = 0.895) was achieved for the
research instruments. Data collected was analyzed with the aid of SPSS (version 21)
and STATA (Version 15) software. Descriptive statistics were used to describe the
social-demographic attributes of the guests. Effect of demand based pricing strategy
was modelled under Structural Equation Model. The estimated model parameters using
maximum likelihood revealed that value added pricing strategy (p=0.001) and
concession pricing strategy (p=0.004) influenced guest purchase decision significantly
at 5% significance level. However, discounted pricing strategy (p=0.112) did not
influence purchase decision significantly. Effect of hedonic pricing was estimated
under multiple regression equation. The regression coefficients revealed that hotel
location (p=0.006), presence of bath and shower in bathroom (p=0.012), service of
breakfast (p=0.016), presence of LED television in the room (p=0.004), availability or
swimming pool (p=0.015) and a fitness center (p=0.043) influenced purchase price
significantly. The presence of conference facilities (p=0.676), internet availability
(p=0.117), accessibility of hotel through road network (p=0.376), star rating (p=0.523)
and association with a chain (p=0.081) did not have a significant effect on guest
purchase price. The study recommends that for hotels’ to increase guest purchases, they
should utilize value added and concession pricing strategies. Hotels should
communicate the benefits obtained from consumption of a service, involve guests when
setting prices as well as affiliate themselves to a chain or have a chain outlet within
their facilities for increased guest purchases. | en_US |
