Why do we buy luxury experiences?

Abstract

Purpose The luxury segment of the hospitality industry has experienced substantial growth in the past decade. Unfortunately, the notion of perceived luxury values has received scant attention, and there is a lack of valid framework to capture consumers’ value perceptions in the context of luxury hospitality services. Using luxury restaurant as an example of luxury hospitality services, this paper aims to establish the structure of luxury hospitality values and their measures and to investigate the relationship between luxury hospitality values and purchase intentions. Design/methodology/approach A survey questionnaire was developed to test the proposed luxury value framework. Confirmatory factor analysis and hierarchical linear regression were used to test the hypotheses. Findings Four luxury restaurant value dimensions including functional value, hedonic value, symbolic/expressive value and financial value were identified. The study results further reveal that a consumer’s purchase intention is influenced primarily by hedonic value, followed by functional value and financial value. Interestingly, unlike in the context of luxury goods, the purchase of luxury restaurant services is not substantially influenced by symbolic/expressive value. Practical implications Hospitality firms catering to the affluent might use the luxury value framework to better understand what drives their customers’ purchase intentions, and use such knowledge to create new services or to improve current product offerings. In addition, luxury hospitality companies can use this luxury value framework to position their brands/products. Originality/value To the best of the authors’ knowledge, this study is the first that empirically tests a luxury value framework in the luxury hospitality context and investigates the relationship between luxury hospitality values and purchase intentions.