Digitalization is rapidly transforming the hotel industry. Artificial intelligence, data-driven revenue management, and dynamic pricing are increasingly shaping how offers are designed and evaluated. Yet despite all these technological advancements, one key fact remains: in the end, it is still a person who clicks “Book.”
NB: This is an article from RateBoard
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This is precisely where Prof. Dr. Kai-Markus Müller’s research comes in. The professor of consumer behavior and Chief of Behavioral Strategy at RateBoard investigates how people actually make decisions and why these decisions are often less rational than many people think.
His findings are particularly relevant for hotel managers, revenue managers, and marketing executives. This is because they show that successful pricing strategies should be based not only on data, but also on a deep understanding of human decision-making psychology.
Decisions are made more quickly and emotionally than expected
Many booking decisions are made in a fraction of a second. Neuroscientific studies show that our brain makes an initial assessment of an offer after just about 200 milliseconds. Shortly thereafter comes an emotional assessment, during which we decide whether we find an offer appealing or not.
This emotional aspect plays an exceptionally important role, particularly in the tourism industry. People view travel not merely as a product, but as an experience. Studies even show that, in the tourism sector, consumers are often more willing to accept higher pricing than they are for traditional consumer goods. When on vacation, people often expect to pay higher prices as long as the experience is worthwhile.
For hotels, this means that guests do not make decisions based solely on rational considerations. Perception, emotion, and presentation can have just as much influence on booking decisions as price and service.
The “Less is Better” Effect in Tourism
A fascinating phenomenon in consumer psychology is the so-called “less-is-better” effect. This describes how, in certain situations, people prefer an objectively inferior offer when they consider it in isolation.
A classic example from research illustrates this principle: When people are asked to choose between three perfectly presented products, they often rate this selection higher than a larger selection of products in which some items appear damaged or inferior. Although the second option objectively offers more value, it is perceived as inferior.
The reason for this lies in how we perceive things. People often judge the quality of the overall picture rather than rationally weighing the individual components against one another.
