By Timm Teubner and Antje Graul
It is one of the oldest tricks in the book. While looking for accommodation on platforms such as Booking.com or Expedia, consumers are likely to encounter messages telling them that “all but one room have sold out,” or that a specific item has been “booked over 78 times within the last 24 hours.” Of course, most people are perfectly aware of the fact that this cannot actually be true (… or can it?). If not in panic mode yet, the website will go on to tell that – at this very moment – 143 other people are looking for rooms too. It will even show other hotels just to add that those have just sold out. Such communication of scarcity has emerged as a widely-used marketing principle in electronic commerce, especially on hospitality platforms.
In this paper, BCCP Fellow Timm Teubner and co-author Antje Graul investigate the effect of scarcity cues on consumer behavior. Using data from Airbnb and Booking.com, they show that scarcity cues are used differently by hotel versus peer-based hospitality platforms. They then conduct an online experiment of consumer perceptions of scarcity, finding support for two distinct effects, with scarcity perceptions leading to increased booking rates through urgency (the get-it-before-it’s-gone effect) and value (the must-be-good effect). Although many consumers dismiss such coercive digital sales practices as unbelievable, they are still quite effective in triggering booking decisions. The present paper provides explanations for why and how this is.
The study Only one room left! How scarcity cues affect booking intentions on hospitality platforms was recently published in Electronic Commerce Research and Applications.