Service Quality and Customers' Willingness to Pay More for Travel Services

Increasingly sophisticated and price conscious consumers have combined with forces of globalisation and electronic commerce to create new challenges for travel agents. To maintain efficiency and profitability, travel agents need to know the links between service quality and customers' willingness to pay more (WTPM). These links are explored through measuring customer perceptions (N = 122) of service quality, loyalty and WTPM. The results revealed firstly that while many consumers were able to pay more for travel services, fewer were willing to do so. Secondly, overall service quality and its underlying dimensions were positively associated with selected WTPM items. These findings support and extend previous studies on the service quality-behavioural intentions link and provide practical implications for the travel industry in relation to a differentiated price and service strategy.