Absolute price as a determinant of perceived service quality in hotels: a qualitative analysis of online customer reviews

User generated content and especially customer-generated reviews are becoming a prominent information source for travellers making hotel booking decisions. Building upon the dimensions of the SERVQUAL model, the aim of this study is to identify why hotel customers have disparate opinions regarding perceived service quality during their stays. In order to do so, we distinguish between high and low absolute priced hotels. We adopt this categorisation based on prior studies, which identify price as a strong determinant of hotel customers’ perceptions and decisions. By applying qualitative data analysis methods on customer reviews from one of the world’s leading online hotel reservation agencies (Booking.com), we show that absolute price has an impact on how customers perceive various dimensions of service quality. In particular, the number of positive reviews is significantly different for low and high priced hotels when examining the dimensions of tangibility and empathy. Additionally, our research reveals that the number of negative reviews also differentiates significantly for low and high priced hotels, not only for the dimensions of tangibility and empathy but also with regard to responsiveness and reliability. Based on these findings we highlight implications for researchers and practitioners and suggest future directions for research.