Effects of Option Framing on the Purchase of Luxury Hotel Ancillary Amenities

Abstract

When booking a hotel, customers typically select a room size and then add extra services like breakfast or spa access, generating ancillary revenue. While widely studied in airlines, ancillary revenue is less explored in hotels despite its growing importance. Hotels often use upselling, where customers start with a basic room and add services. However, marketing research suggests that offering all services upfront and allowing customers to remove options (downward framing) leads to higher ancillary purchases. This study examines how framing impacts customers’ decisions to buy additional services, and explores the role of anticipated regret in these choices. Using a multiple-method approach, including experiments and choice modeling, the research offers insights into the most effective framing strategies to maximize ancillary revenue in hotels.