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Adoption of Covid-19 safety certification and pricing strategy in the hotel industry

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  • Sauveur Giannoni
  • Sylvain Petit
  • Louinord Voltaire
  • Philippe Chagnon
  • Jean Ralph Marvensky Paul

Abstract

The tourism sector has voluntarily undertaken several initiatives to boost customer confidence in response to the COVID-19 pandemic. For example, in the hotel industry, three different strategies have been implemented: sending no COVID-19 safety signal; sending a moderate signal through a charter; or sending a strong signal through a label. This study aims to identify the main drivers of the hotels’ choice among these strategies and to analyze the influence of their choice on price setting. We estimate a system of three equations (hotel pricing, star rating, COVID-19 safety signal) on a sample of 418 rated hotels in the Hauts-de-France region. Results support three main findings: 1) star rating positively correlates with COVID-19 certification; 2) COVID-19 certification has a strongly negative impact on hotel prices; 3) star rating moderates positively the effect of COVID-19 certification on prices. Furthermore, error terms between the star rating level and COVID-19 certification equations are strongly correlated. Hence unobserved common factors play a role in the adoption of these quality signals. Our findings are consistent with the idea that managers implementing safety signaling strategies are more worried about recovery speed after lockdowns.

Suggested Citation

  • Sauveur Giannoni & Sylvain Petit & Louinord Voltaire & Philippe Chagnon & Jean Ralph Marvensky Paul, 2024. "Adoption of Covid-19 safety certification and pricing strategy in the hotel industry," Applied Economics, Taylor & Francis Journals, vol. 56(15), pages 1723-1747, March.
    • Handle: RePEc:taf:applec:v:56:y:2024:i:15:p:1723-1747
    DOI: 10.1080/00036846.2023.2177596
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