THE IMPACT OF PRICING STRATEGIES ON GUEST PURCHASE DECISIONS IN STAR RATED HOTELS IN NAKURU COUNTY, KENYA

Abstract

The study examined the effect of pricing strategies on guest purchase decision in star rated hotels.
Objectives were to: establish the effect of value added, discounted and concession pricing strategies
on guest purchase decision. The study was conducted in Nakuru County, Kenya. The study employed descriptive cross sectional research design. A sample size of 236 guests was derived. Purposive and proportionate sampling techniques were used to select hotels and guests respectively. Data
was collected using a structured questionnaire designed using likert type of scale. Effect of value
added, discounted and concession pricing strategies were modelled under multiple regression model.
Significant levels were sought at p < 0.05. From the multiple regression analysis, the results showed
that Value added pricing (p = 0.000) and Concession pricing (p < 0.000) influenced guest purchase
decision significantly while discounted pricing (p < 0.114) did not. The major conclusion that the
researcher drew from the study was pricing is a major component that influence guest purchase decision. The recommendation from the study is that the hotel practitioners should heavily invest in utilizing the value added and concession pricing and communicate to guests the benefits obtained from
a service.