Perceived fairness of revenue management in the US golf industry

Abstract

Experience in other industries has shown that revenue management can increase revenue without affecting customer satisfaction. Revenue management, however, is underutilised in the golf industry, as customers are believed to perceive such practices as unacceptable and unfair. This paper explores six revenue management practices that might be suitable in a golf context and examines their perceived fairness. The results show that golfers perceive arrival duration control practices in the form of reservation fees or no-show fees as fair. In addition, it was found that golfers perceive demand-based pricing in the form of coupons (two for the price of one), time-of-day and reduced tee time intervals as fair. Conversely, time-of-booking pricing was perceived as neutral to slightly unfair. Varying price levels were seen as unfair, with potential negative consumer reactions to this practice. Furthermore, the paper explores whether framing demand-based pricing as discounts rather than surcharges would make a difference. It was found that demand-based pricing presented as discounts were generally seen as fairer and therefore less likely to have a negative impact on consumer perceptions and reactions.