Resort fee transparency: the impact of framing and mental budgeting on consumer decision-making
Lisa Cain, Sarah Tanford, Christopher P. CainPurpose
This study investigated how resort fee presentation, through the lens of framing, price transparency and mental budgeting, impacts customer decision-making in hotel booking now that fee disclosures are mandatory. It sought to identify effective pricing strategies beneficial to both hotel customers and operators.
Design/methodology/approach
Two experimental studies were conducted using factorial designs. In study 1, 248 participants and in study 2, 320 participants evaluated hotel booking scenarios that were modeled after online booking scenarios. Across both studies, participants evaluated measures including booking intention, perceived fairness, gain/loss, pain buffering and pleasure attenuation.
Findings
Study 1 revealed that resort fee amount strongly influenced consumer evaluations, with lower fees perceived as fairer, more appealing and more valuable, while framing had no significant effect. Study 2 showed that booking intention was higher when resort fees were optional and under subtractive framing, with psychological mechanisms aligning with pain buffering and pleasure attenuation. Bundled pricing was preferred with subtractive framing, whereas itemized pricing enhanced fairness and appeal under additive framing when expense categories were provided. These results highlight that transparency and mental budgeting moderate framing effects, shaping perceived fairness and purchase intentions.
Research limitations/implications
This research integrates prospect theory, mental accounting and dual processing theory to explain how consumers evaluate bundled versus itemized pricing. It demonstrates that framing effects rely on both cognitive effort and contextual factors. While subtractive framing generally prevails, additive framing becomes effective when itemization aligns with mental budgeting categories.
Originality/value
This study integrates framing, mental accounting and dual-processing theories to explain consumer responses to resort fees under mandated price transparency. The study reveals when framing effects persist through heuristic versus systematic processing, and when they collapse due to price dominance. The study provides actionable insights for hospitality pricing strategies in response to regulatory changes and contributes to the broader understanding of consumer psychology in travel decision-making.