Only one room left! How scarcity cues affect booking intentions on hospitality platforms [Summary]

Abstract

Communication of scarcity has emerged as a fundamental marketing principle in electronic commerce and for hospitality platforms in particular. We investigate the effect of scarcity cues on consumer behavior. First, we explore actual market data from Airbnb and Booking.com, and find that scarcity cues are used differently by hotel versus peer-based hospitality platforms. Second, we conduct an online experiment on consumer perceptions of scarcity. Specifically, we find support for two distinct effect paths, along which scarcity perceptions lead to increased booking intentions through urgency (the get-it-before-it’s-gone effect) and value (the must-be-good effect). We discuss practical implications of our results as well as the potential for the misuse of scarcity claims for unfair competition.