When and why does customization reduce booking cancellations? Field evidence from two hotels

Abstract

Purpose

This study employs S-D Logic to examine the hotel booking behaviors of individuals, with a focus on the impact of service customization on service cancellation. Additionally, the moderating role of social co-creation is explored to provide further insight.

Design/methodology/approach

The paper draws on booking data from two hotels: a resort hotel with 40,060 recorded bookings, including 11,122 cancellations, and bookings from a city hotel with 79,330 bookings, including 33,102 cancellations.

Findings

The result reveals that bookings with higher levels of initial customization, such as special requests, are more likely to be modified later and less likely to be canceled. Interestingly, while multi-adult bookings were found to have a higher cancellation rate than individual bookings, the effects of customization commitment were more pronounced for multi-adult bookings.

Originality/value

This paper is the first to establish a connection between service customization, the number of adults on a booking and the likelihood of cancellation, thus providing new empirical evidence for the emergence of customization effects in services. Additionally, the study identifies important contingencies based on the number of consumers in a booking.