When will consumers splurge on travel? Effective add-on selling strategies

Abstract

Purpose

Cross-selling becomes critical for business success as pent-up travel demand drives travelers to spend more on vacations. The primary purpose of this research is to identify if an unexpected discount leads to consumers' additional purchases online. This research proposes effective cross-selling strategies across hospitality sectors.

Design/methodology/approach

Two experiments were conducted to investigate factors that influence travelers' add-on spending. Study 1 determined the psychological mechanism of unexpected discounts on hotel customers' additional spending by individual thinking styles. A 2 (discount: none vs surprise) x 2 (thinking style: holistic vs analytic) quasi-experimental design was utilized. Study 2 applied the identified pricing strategy by individual thinking styles to cruise line add-on selling. A 2 (discount: none vs surprise) x 2 (product type: hedonic vs utilitarian) x 2 thinking style (holistic vs analytic) quasi-experiment was used.

Findings

The findings indicate that an unexpected discount increases holistic thinkers' overall travel spending, regardless of add-on types. Although the unexpected discount effect on analytic thinkers' overall spending was significant, an unexpected discount enhanced their intentions to purchase a hedonic add-on.

Practical implications

Hospitality operators can improve cross-selling strategies with a surprise discount offer. Offering add-on items in the same transaction with a cabin booking will increase add-on purchases. Hotels can make add-on purchases more appealing by emphasizing the experiential aspects of a hotel stay.

Originality/value

This research broadens knowledge of cross-selling by linking add-on purchases to discount pricing on a primary product. The findings provide new strategies to stimulate add-on purchases and maximize profitability.

Citation

Kim, E.L. and Tanford, S. (2023), "When will consumers splurge on travel? Effective add-on selling strategies", Journal of Hospitality and Tourism Insights, Vol. 6 No. 5, pp. 2416-2432. https://doi.org/10.1108/JHTI-07-2022-0306