Perception of Experiential Value in Luxury Hotel Settings: The Case of Experiential Programming and Impact on Consumers

Document Type

Dissertation

Publication Date

2023

Abstract

A luxury shift has occurred and been reflected in the way consumers now define luxury. Classical luxury, in a traditional sense, is best depicted by materialistic expenditures. Contrastingly, contemporary luxury presents more novel and authentic experiences to consumers. The luxury lodging industry has been capitalizing on this shift through experiential marketing and immersive experience presentation. Many luxury hoteliers have been employing, developing, implementing, and diversifying service experiences to enhance their consumers’ stay experiences. Notably, luxury hoteliers have been at the forefront of contemporary luxury presentation through experiential program development and execution, whereby hotel managers introduce consumer engagement with fellow consumers and employees, immersion in a hotel’s locale and culture, and personal characteristics of consumers as primary dimensions of guest experiences. These programs are diverse, and some examples include Surfing Lessons in San Diego, California, Cactus Garden Tours in Scottsdale, Arizona, Mountain Climbing Instruction in Colorado Springs, Colorado, Ukulele Lessons in Kona, Hawaii, and Peach-flavored Desserts in Atlanta, Georgia. This programming is often a free-to-consumer amenity, performed by luxury hotel staff themselves, rather than recruiting a third party. Luxury hotels in similar geographic locations often provide experiential programs that are virtually identical to one another. It is not understood whether implementation of these experiential programs really matters in terms of eliciting luxury hotel consumers’ positive attitude toward the hotel and their future spending behaviors.

By adopting the value, attitude, and behavior (VAB) model as an overarching theory, the current study investigates how consumers’ perceived value of luxury hotel experiential programing may impact their attitude and spending behavior toward the luxury hotel setting.

First, founded in the Experience Economy Model, this study identified underlying experiential values that consumers may perceive through engaging in experiential programs in a luxury hotel setting. This study further investigated how those consumers’ perceived experiential program values impact their attitudes, revisit intention and willingness to pay (WTP) for luxury hotel accommodations and services. Specifically, this study detected the key experiential values that would influence consumers' attitude which in turn influencing their revisit intention and WTP.

To conceptualize consumers’ perceived experiential values in the context of luxury hotel experiential programming, the study adopted a scale development procedure proposed by Churchill (1979). Structural equation modeling (SEM) was used to identify the key experiential values influencing consumer attitudes, which in turn impacting behavioral intentions, and WTP. Specifically, Anderson and Gerbing’s (1988) two-step approach of SEM was employed including measurement model testing via another round of CFA, followed by the assessment of the structural model.

The results of the study revealed five experiential value dimensions including education, escape, esthetics, personalization, and cherishable, with a total of 23 items. The results further showed that among the 5 dimensions of experiential value, cherishable and esthetic experiential values had significant impacts on consumers’ attitude toward experiential programs. Consumers’ attitudes toward experiential programs also had a positive, significant impact on the luxury hotel revisit intentions. Further, luxury hotel revisit intent was found to have a significant, positive impact on WTP. Consumers’ attitudes toward experiential programs were found to have a negligible, direct effect on WTP.

This study was to fill a literature gap on experiential programming effects on consumers’ attitude and impact these experiential programs may have on consumers’ spending behaviors, specifically revisit intentions and willingness to pay more for luxury hotel accommodations and services. In addition, this study adds to the recent surge in scholarly work on experience-centric luxury environments, focusing on the transition from classical, materialistic luxury to contemporary, experiential luxury. This research also can be used for hoteliers to design effective programs that drive positive consumer spending behavior and increase consumer satisfaction by promoting the best experiences and ways to immerse consumers in the local culture during their stay.

Publisher

Iowa State University

City/State

Ames, IA

Department

College of Business and Management

Comments

A dissertation submitted to the graduate faculty in partial fulfillment of the requirements for the degree of Doctor of Philosophy

Major: Hospitality Management

Program of Study Committee:

  • EunHa Jeong, Major Professor
  • SoJung Lee
  • Thomas Schrier
  • Ken Tsai
  • Joan Su

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